Quantum computing growth stocks like Rigetti Computing and IonQ have been popular investments this year. It seems investors see a lot of long-term potential in these companies.

I’ve been buying another quantum computing stock, however. Because unlike Rigetti and IonQ – which trade at sky-high price-to-sales multiples – this stock actually looks cheap.

An under-the-radar quantum computing stock

The stock I’ve been buying lately is SkyWater Technology (NASDAQ: SKYT). It’s a small US chip manufacturer that operates across a range of end markets including aerospace and defence and partners with small companies to help them develop and manufacture chips.

Recently, it has been moving into the quantum chip space. Last quarter, for example, it signed four new deals with quantum companies and achieved record revenues from this side of business.

Looking ahead, SkyWater plans to be the foundry (chip manufacturing) “partner of choice” for the quantum market. “We believe our exclusively US focus and trusted status as a pure-play foundry partner make us the ideal manufacturing partner for multiple quantum computing technologies, and we expect to announce continued momentum in the coming quarters,” said the company in its Q3 earnings.

So, to me, it looks to be a classic ‘picks-and-shovels’ play on the quantum computing market. As the quantum industry grows, this company could do well no matter who has the best technology.

Attractive valuation

Now, as I said above, this stock actually looks quite cheap. The company isn’t profitable so there’s no price-to-earnings (P/E) ratio (although it did generate non-GAAP net income of $11.5m last quarter).

But if we take the revenue forecast of $609m for next year and the current market cap of $980m, we get a price-to-sales ratio of just 1.6.

That compares to around 440 for Rigetti and 100 for IonQ. So, the stock is significantly cheaper than other players in the quantum computing industry.

It’s also quite cheap compared to other chip manufacturers. Taiwan Semiconductor, for example, has a price-to-sales ratio of about 10.

Other reasons I’m bullish

Looking beyond the quantum computing exposure and the low valuation, there are a few other things I like about this company from an investment perspective.

One is the fact that SkyWater recently acquired the Fab 25 manufacturing facility in Texas from Infineon. This has added significant production capacity.

Another is the fact that SkyWater operates in the defence and aerospace markets. Note that it has a Category 1A Trusted Supplier Accreditation granted by the US Defense Microelectronics Activity (DMEA), meaning that it’s Department of Defense (DoD) accredited.

Additionally, it’s the only publicly-traded chip manufacturing company that only produces chips in the US. If we see geopolitical tensions rise between US/China/Taiwan, I think we could see a sharp valuation re-rating here.

Finally, the CEO, Thomas Sonderman, has a really interesting background. Previously, he worked at GlobalFoundries and AMD.

High-risk, potentially high reward

I’ll point out that SkyWater is one of the riskiest stocks in my portfolio today. Not only is it not profitable (meaning its share price is very volatile) but it’s up against some much more powerful players.

I see a lot of potential in the long run though. If an investor has a high-risk tolerance, it could be worth a closer look.