Quantum Computing Stocks Face Scrutiny Over Valuations

In recent months, well-known quantum computing stocks have seen significant price increases spurred by a wave of optimistic news. However, experts are raising concerns about whether these stocks are overvalued. While a few analysts maintain a positive outlook, others suggest the potential for price manipulation.

Recent Developments: Stocks such as IonQ Inc., Rigetti Computing Inc., Quantum Computing Inc., and D-Wave Quantum Inc. have demonstrated impressive gains over the past six months and the past year. The Defiance Quantum ETF, which tracks these companies, has also shown significant growth, rising by 26.29% over six months and 53.69% over the last year.

Stocks	Six Month Performance	One Year Performance
Rigetti Computing Inc RGTI	860.68%	1058.76%
Quantum Computing Inc QUBT	1548.48%	1260.00%
D-Wave Quantum Inc QBTS	405.22%	718.31%
IonQ Inc IONQ	385.40%	282.95%
Defiance Quantum ETF QTUM	26.29%	53.69%

These quantum computing companies are currently in a growth phase and have yet to generate positive earnings, which makes it difficult to use the price-to-earnings ratio for valuation. Instead, analysts focus on the price-to-sales ratio, which divides a company's market capitalization by its total sales. However, this measure also indicates that these firms have high valuations.

Stocks	Price-To-Sales Ratio
Rigetti Computing	150.48
Quantum Computing	2672.50
D-Wave Quantum	104.63
IONQ	381.86
Average	827.3675

Source: Bloomberg

CNBC's Jim Cramer recently encouraged investors to consider quantum stocks, advising them to reinvest profits from GameStop Corporation into Rigetti. He pointed out the stock's substantial trading volume but cautioned that investors should proceed with care.

Experts like Nigam Arora and Dr. Natasha Arora from The Arora Project have warned investors to navigate this market carefully. They advocated patience, stating, “under the present situation of quantum stocks becoming totally divorced from reality, the best course of action for investors is to be patient.”

Arora further noted that these stocks appear to be influenced by memes and social media trends, which could lead to misguided investment behaviors. “It is a grave mistake to emulate meme crowd behavior and become prey to the manipulators,” he said.

Why This Matters: The quantum computing industry gained traction after Google's announcement regarding the Willow chip in December 2024, drawing public interest. However, suggestions from Nvidia Corporation CEO Jensen Huang at CES hinted that real, practical applications of quantum computing might still be 15 years away. Many scientists share this view, expecting a longer timeline for the development of commercially viable quantum computers.

This cautious outlook was echoed by Mark Zuckerberg from Meta Platforms Inc, who discussed the limitations of current quantum technology during a podcast with Joe Rogan.

Despite this tempered view, Microsoft Corporation is actively preparing its clients for the future of quantum computing, aiming to have businesses “quantum-ready” by 2025. This proactive stance reflects a commitment to the advancing technology, even as it remains in its infancy.

Following suit, Nvidia announced its inaugural Quantum Day at the 2025 GPU Technology Conference, indicating a growing interest within the industry.

quantum, stocks, valuation