MW Quantum-computing stocks sink as Nvidia CEO delivers a reality check
By Emily Bary
Shares of Rigetti Computing, Quantum Computing, IonQ and D-Wave are down sharply as Nvidia's Jensen Huang says 'very simple quantum computers' could be 20 years away
Quantum-computing stocks have surged in recent months, reflecting hype that's at odds with the current financial reality of these businesses, which still bring in minimal revenue.
The stocks are falling hard on Wednesday, however, after Nvidia Corp.'s $(NVDA)$ chief executive outlined some other realities for the quantum sector, including that quantum computers are still a ways off.
To say it would take 15 years to get "very simple quantum computers" is an estimate that "would probably be on the the early side," Nvidia CEO Jensen Huang said during a question-and-answer session with analysts Tuesday at the CES tech conference. A 30-year estimate "is probably on the late side," Huang continued, saying that 20 years seems more believable.
Read: Nvidia's stock suffers worst drop in months as CES speech lacked one big thing
That's even as Huang sees Nvidia playing a role in the quantum trend as it works with "just about every quantum company" by extending its CUDA software to the quantum realm. "What we're interested in is we want to help the industry get there as fast as possible, and to create the computer of the future, and we'll be a very significant part of it," he said.
Rigetti Computing Inc. shares (RGTI) are down about 24% in premarket trading Wednesday, while Quantum Computing Inc. shares (QUBT) are off 23%, IonQ Inc. shares $(IONQ)$ are down 16% and D-Wave Quantum Inc. (QBTS) shares are down 28%.
Huang also talked Tuesday about how quantum computers are good for "small-data, big-compute" problems, but not for problems that require a large amount of data, given that people communicate with these computers through microwaves.
The commentary served to throw cold water on quantum stocks, which have seen exponential rises in a short span. Over the past three months, through Tuesday's close, Quantum Computing and Rigetti Computing shares had each climbed more than 2,000%. D-Wave Quantum's stock gained 942% in that period, while IonQ's rose 419%.
But meaningful revenue for the companies is still elusive. Quantum Computing, for example, generated $101,000 in revenue during the third quarter, and the one analyst projection listed on FactSet estimates about $500,000 for 2024. IonQ is expected to deliver $41.6 million in annual revenue for 2024, according to FactSet estimates, still a small sum for a company with a market capitalization north of $10 billion as of Tuesday's close.
See also: Micron's stock looks like a winner after Nvidia CEO Jensen Huang's CES keynote
-Emily Bary
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January 08, 2025 09:34 ET (14:34 GMT)
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