Today witnessed another dip in stock prices for Quantum Computing companies D-Wave Quantum, Quantum Computing, and Rigetti Computing, observing a further decline.
Quantum computing stocks like D-Wave Quantum (QBTS), Quantum Computing (QUBT), and Rigetti Computing (RGTI) took a nosedive again on Monday, with Metta Platforms CEO Mark Zuckerberg joining the chorus of skeptics on the emerging technology. Last Wednesday, these stocks suffered a massive 40% plunge after Nvidia CEO Jensen Huang stated that quantum computing technology is still decades away from being "very useful."
Zuckerberg echoed this sentiment during a recent interview with Joe Rogan, fueling broad tech stock sell-off as well. Investors seemed to trade risk-off behavior, with bets on Federal Reserve rate cuts this year declining after a strong jobs report. The movement also likely impacted quantum stocks, given their unprofitability and minimal revenue.
By 11:16 a.m. ET, D-Wave Quantum's shares had plummeted 31.4%, Quantum Computing's had dropped 24.7%, and Rigetti Computing's had lost 25.5%.
The Fading Quantum Hype
In the Rogan interview, Zuckerberg revealed his doubts about quantum computing's potential, stating it was likely a decade or more away from being a "very useful paradigm."
Similarly, Nvidia CEO Jensen Huang cast shadows on the idea that quantum computing might revolutionize the tech industry. This is despite Alphabet's recent research milestones.
D-Wave Quantum itself reported some positive news last Friday. The company filed for a stock sale plan, allowing it to sell up to $150 million in shares. While investors tend to dislike secondary offerings, they can help raise cash during a period of elevated stock prices, especially for a development-stage company like D-Wave.
During the same period, D-Wave announced that fiscal 2024 bookings would surpass $23 million, up 120% from fiscal 2023 levels. The company also announced Q4 bookings would exceed $18 million, up 500% from a year ago.
However, none of the quantum computing stocks seemed to benefit from this positive news.
The Future of Quantum Computing Stocks
These stocks still retain billion-dollar valuations, which is pricey for development-stage companies. The downturn after the recent surge highlighted the sector's potential for further falls.
Despite the skepticism, speculative investors could consider holding small positions in these stocks. But with competition from tech giants like Alphabet, the success of quantum computing doesn't guarantee success for these individual stocks.
The Quantum Computing Conundrum
While evidence of rapid progress in quantum computing is mounting, with advancements in hardware scalability and algorithmic improvements, some industry leaders remain cautious. Nvidia CEO Jensen Huang is one such leader, predicting a 15- to 30-year wait before "very useful" quantum computers are available.
This mix of optimism and skepticism has contributed to volatile stock performance over the past few weeks. Companies like D-Wave, Quantum Computing, and Rigetti have witnessed significant share price swings.
This debate like the one between Zuckerberg and Huang, as well as Peter Barrett's[ positive view on quantum computing advancing faster than predicted, highlight the ongoing uncertainty surrounding the practical application of quantum computing technology.
In the realm of quantum computing, optimism and skepticism coexist, driving both investors and technologists to closely monitor advancements in this emerging field.
Given the skepticism expressed by tech leaders like Nvidia's Jensen Huang and Meta's Mark Zuckerberg about the near-term usefulness of quantum computing, some investors might want to reconsider their investment strategies in this sector. This could potentially lead to a re-evaluation of their finance Portfolios, involving money reallocation away from quantum stocks.
As quantum computing stocks continue to grapple with unprofitability and minimal revenue, the recent sell-off could be indicative of a broader trend. This trend might suggest that investors are becoming more cautious about investing money in these stocks, given the long-term uncertainty surrounding the technology's commercial viability.
