Quantum Losses

Talk about a computer crash.

Quantum computing stocks tumbled today after Nvidia CEO and AI-whisperer Jensen Huang warned that functional quantum computers are still decades away.

Rigetti Computing dropped 45.41% while Quantum Computing Inc. sank 43.34%, and IonQ fell 39%—just weeks after all three stocks had soared on market hype.

Investors have bet heavily on the novel, futuristic technology, which scientists say will leverage powerful quantum mechanics to create super-powerful computers. The excitement was enough that shares of both Rigetti Computing and Quantum Computing rose a staggering 2,000% over the past three months alone. But with many leading quantum firms having little to show so far for their efforts, investors’ speculative bets ended up creating more of a bubble than a perceptive gamble.

Getting realistic

Multi-digit drops over one person’s comments might seem a little dramatic, but quantum stocks have been riding more on hype than solid fundamentals for a while. For example, IonQ is projected to deliver $41.6 million in annual revenue for 2024—pretty good, but still tiny compared to other firms like it with a market cap of roughly $10 billion.

That said, while quantum supercomputers might sound more like something from a Marvel movie than a real investment prospect, this tech will pack a punch—even if that punch is decades away. For example, Google said last year that Willow, a new quantum computing chip, could take five minutes to do a computation that would otherwise take today’s supercomputers 10 septillion years—or 10,000,000,000,000,000,000,000,000 years, to be exact.

The bottom line: Our favorite leather jacket-clad CEO continues to flex Nvidia’s AI muscle, proving just how much his influence has come to dominate the tech landscape. His offhand musings are taken as gospel by investors.

Maybe in his next Q&A he can tell everyone to subscribe to this newsletter.—LB