close
close

Quantum computer stocks plunge after Nvidia boss comments

Posted on by Peyom
Quantum computer stocks plunge after Nvidia boss comments

Selma Schmitt

by Selma Schmitt

January 11, 2025, 8:00 a.m

2 mins

A remark by the Nvidia boss caused quantum computing stocks to plummet. How risky is an investment in the stock?

The shares of several quantum computing companies collapsed massively on Wednesday: the prices of D wave, Rigetti, IonQ and Quantum computing Rushed between 36 and 45 percent in depth. Nvidia boss Jensen Huang triggered the price slide. He suggested that it would be another 20 years before a truly useful quantum computer comes to market.

The crash comes as a surprise, as the market for quantum computing stocks is actually on the rise. Standing despite the absurdity of this week D wave, Rigetti and Quantum computing over the year, still 593, 780 and 1026 percent plus. But whether the titles will continue to make progress in the future is not a problem.

Supercomputers in their infancy

Quantum computers apply as a supercomputer of the future. They are said to be significantly more powerful than normal computers and could provide a massive leap forward for applications in the areas of artificial intelligence and big data. There is correspondingly great interest from large corporations and investors. But the technology is still in its infancy.

And here’s the crux of the matter: How long it will take for the technology to be ready for the market is unclear. There are already some quantum computers on the market, However, these only use individual quantum effects and are not universal quantum computers. It is not entirely clear whether they are currently actually superior to conventional computers. The current sales of quantum companies are correspondingly meager. D wave generated $1.9 million in the third quarter of 2024 Rigetti It was 2.4 million US dollars.

“We are not surprised by the correction”

That doesn’t stop investors from speculating on the golden future of tech companies. It wasn’t until December that Alphabet’s subsidiary Google triggered a price jump after the company introduced a more powerful chip. The technology breakthrough also helped the other quantum companies make massive gains.

Perhaps the markets were a little too optimistic, some analysts warn. “As valuations have become somewhat high, we are not surprised by today’s correction,” commented for example Greg BassukCEO of asset manager AXS Investments, told CNBC the development on Wednesday. Also Ivana DelevskaInvestment director at Spear Invest expects that the first mass-produced quantum computers will only come onto the market in 15 to 20 years. Nevertheless, the investment house’s funds are already invested in Rigetti and IonQ. Craig Hallum analyst Richard Shannon believed the bet could pay off a little sooner. He expects “significant state-related income” for the quantum companies within the next few years.

Rely on established companies with a quantum division

An investment in quantum stocks is, above all, a bet on the more distant future – and such long-term bets are risky: after all, it is impossible to predict 20 years in advance which companies will prevail on the market and which will fail. And – as recent events have clearly shown – things will remain extremely volatile until then. If you can’t tolerate this risk, you might be better off with established companies. So recommends Paul Meeks, Head of investment at asset manager Harvest Portfolio Management told “Handelsblatt” to bet on tech companies. Although these companies are investing in quantum computing research, they also have other well-performing business areas. In addition to Alphabet (Google), this applies to IBM and Microsoft, for example.

#Topics