Quantum Stocks Expected to Recover After Recent Market Turbulence

Quantum computing stocks, including Rigetti Computing, Inc. (RGTI) and IonQ, Inc. (IONQ), faced significant losses on Wednesday. This drop followed remarks made by NVIDIA Corp. CEO Jensen Huang, suggesting that practical quantum computing is still decades away.

What To Know: During an investor event on Tuesday, Huang expressed a pessimistic outlook on the timeline for quantum computers becoming useful. He mentioned, "If you kind of said 15 years for very useful quantum computers, that would probably be on the early side. If you said 30, it’s probably on the late side. If you picked 20, I think a whole bunch of us would believe it." His comments triggered a sharp decline in quantum stocks during after-hours trading.

After Huang's statements, quantum stocks continued to drop throughout Wednesday. Rigetti Computing saw a closing decline of 43.8%, D-Wave Quantum Inc. (QBTS) fell 36%, and IonQ's shares ended the day down 39%.

Expert Ideas: Some analysts believe that Huang's comments might have been strategically aimed at steering investor focus away from quantum computing towards AI advancements. Thomas Hayes, chairman of Great Hill Capital, commented, "Any dollar chasing quantum computing stocks is not chasing AI stocks. Jensen threw a wet blanket on the quantum story and did everything he could to sell the AI story. It’s that simple." Another analyst, Richard Shannon from Craig-Hallum, noted that quantum computing could pose a real threat to NVIDIA's market dominance. He remarked that quantum technology "will be disruptive to parts of the classical compute business, of which NVIDIA is a chief beneficiary."

CEO Fires Back: In response to Huang's comments, Alan Baratz, CEO of D-Wave Quantum, dismissed the idea that practical quantum computers are far off in the future. Baratz asserted, "He is dead wrong. D-Wave's quantum computers are already in commercial use by major companies, including Mastercard. Not 30 years from now, not 20 years from now, not 15 years from now, but right now today."

Poised To Recover: After a turbulent trading session, quantum stocks appeared to be rebounding as they headed into Friday. Following Wednesday's evening session, D-Wave soared by 6.89%, Rigetti rallied by 2.89%, and IonQ climbed by 5.92%. This slight recovery suggests that the market is showing resilience despite the recent losses.

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Quantum, Stocks, Market