Wolfspeed (WOLF -3.91%) and IonQ (IONQ -16.77%) aren't generally considered artificial intelligence (AI) stocks. Wolfspeed is a leading manufacturer of silicon carbide (SiC) chips, which are often associated with electric vehicle (EV) powertrains. IonQ develops quantum computing systems and also serves up that power as cloud-based services.

Both companies could benefit from the secular expansion of the AI market. Wolfspeed's SiC chips -- which can operate at higher voltages, temperatures, and frequencies than traditional silicon chips -- are installed in power supply units (PSUs) for AI servers. IonQ's quantum computing systems -- which churn data at a much faster rate than traditional binary computers -- could eventually be used to process complex AI tasks as they become smaller, more power efficient, and make fewer mistakes.

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Over the past 12 months, Wolfspeed's stock plunged about 70% as IonQ's stock nearly tripled. Let's see why the quantum computing stock outperformed the SiC leader -- and if it will remain the better play on the growing AI market.

Why did Wolfspeed's stock crash?

Wolfspeed's SiC chips are used in some AI servers, but it still generates most of its revenue from the EV market. Its revenue surged 42% in fiscal 2022 (which ended in June 2022) as the EV market bounced back from its pandemic-induced slowdown. Its revenue rose another 24% in fiscal 2023 as it maintained that momentum.

However, in fiscal 2024, its revenue only grew 6% as the EV market cooled off and many companies prioritized their purchases of AI GPUs over ancillary chips and components. China also banned its exports of gallium and germanium -- both of which are necessary to produce SiC chips -- amid the escalating tech war.

To make matters worse, Tesla (NASDAQ: TSLA) CEO Elon Musk declared that its future EV powertrains would use fewer SiC chips. However, as Wolfspeed's top-line growth slowed down, it continued to expand its own foundries in New York and North Carolina.

That mix of slowing growth and rising costs, along with the dismissal of its CEO Gregg Lowe last November, rattled the bulls. For fiscal 2025, analysts expect its revenue to dip 6% to $757 million as its net loss widens from $864 million to $1.09 billion. That gloomy outlook caused its stock to tumble as other AI-related chip stocks skyrocketed.

Why did IonQ's stock soar?

IonQ sells three quantum computers: its top-tier Aria system, its commercial Forte system, and its on-premise Forte Enterprise system. Its customers include the U.S. Air Force Research Lab, other government agencies, and major universities. It plans to release its newest system, the Tempo, this year.

Unlike binary computers, which store binary bits of zeros and ones individually, IonQ's quantum computers store them simultaneously in qubits. In theory, quantum systems can process AI applications much faster than GPUs, but they're still too expensive, consume too much power, and make too many errors. That's why Nvidia's CEO, Jensen Huang, recently predicted it could take another 15 to 30 years to bring "very useful quantum computers" to the market.

Nevertheless, IonQ's quantum computing business continues to grow. Its revenue surged 430% in 2022 and 98% in 2023, and it expects 75% to 93% growth in 2024 as it locks in even more customers. For 2025, analysts expect its revenue to more than double from the midpoint of that forecast to $83 million.

It's expected to stay unprofitable, but it could still have a lot of upside potential as the nascent quantum computing market expands. As it scales up those systems, they could gradually be used to dabble in more AI applications.

The better AI stock: IonQ

With an enterprise value of $6.5 billion, Wolfspeed still isn't a bargain at nine times its fiscal 2025 sales. So, without any near-term catalysts, it will stay stuck in the penalty box for the foreseeable future. IonQ, which also has an enterprise value of $6.5 billion, looks a lot more expensive at 78 times this year's sales. However, investors could keep paying a premium for IonQ's stock if they expect its sales to soar over the next decade.

I wouldn't rush to buy either of these stocks today. But if I had to choose one over the other as an alternative AI play, I'd pick IonQ because it's growing faster, it's established an early mover's advantage in a fertile market, and it could have more growth potential than Wolfspeed as its quantum systems become more widely adopted for mainstream computing and AI applications. Wolfspeed could struggle to break out of its niche and keep pace with more diversified chipmakers in the SiC market, and there's no guarantee its SiC chips can completely displace traditional silicon chips over the next few decades.