Quantum Computing Stocks Surge as Investors Navigate Volatility

Investors are experiencing significant volatility in the market for quantum computing stocks, as companies like Rigetti Computing, IonQ, D-Wave Quantum, and Quantum Computing Inc seek to transform quantum theory into practical applications. These companies are racing to develop technology that could solve complex problems currently beyond the capabilities of traditional computers. This emerging field has seen stock prices soar, with some shares increasing by more than 100 percent this year alone.

Strong enthusiasm surrounds quantum computing, with Sylvia Jablonski, chief investment officer at Defiance ETFs, stating, “All of a sudden, it feels like science fiction has moved into the world of real technological possibility.” Despite this excitement, concerns linger about whether investors may be overvaluing these companies. Steve Sosnick, chief markets strategist at Interactive Brokers, posed the question, “What is the right price to pay for a piece of the future?”

As of late October, shares of Rigetti Computing experienced a dramatic increase, climbing from $1.06 to a high of $58. Currently, Rigetti’s stock hovers around $38, reflecting a staggering valuation of more than 1,000 times its sales. In comparison, shares of Nvidia, known for AI chip manufacturing, trade at about 50 times sales. Despite the stock surge, Rigetti’s operations remain unprofitable, as indicated by its financial statements, although a change in the value of its securities did yield a profit in the first quarter of 2025.

The Market Dynamics of Quantum Stocks

The volatile nature of quantum computing stocks has led some analysts to describe the valuation methods as akin to “a magic act.” Christopher Poch, CEO of Promethium Advisors, highlighted the unusual market capitalization of Rigetti, stating, “How else can you explain a company that has a $13 billion market capitalization but only $22 million in forecast revenues?” Current earnings consensus forecasts from LSEG suggest Rigetti will generate $21.9 million in revenue by 2026.

Among the stocks capturing investors’ attention, the “Quantum 4” includes Rigetti, IonQ, D-Wave, and Quantum Computing Inc. Art Hogan, chief market strategist at B. Riley Wealth, noted the collective focus on these four companies. Notably, spokespeople from Rigetti, IonQ, and Quantum Computing did not respond to requests for comment regarding their valuations, while a representative for D-Wave declined to comment on the company’s stock performance or outlook.

Despite the challenging market dynamics, some analysts continue to endorse these stocks. David Williams, an analyst at Benchmark Equity Research, maintains a “buy” rating for Rigetti and recently increased his price target on the stock to $50 per share from $20. However, he cautioned that “the valuation on quantum names is more of an art than science.” Conversely, Craig Ellis from B. Riley downgraded Rigetti to “Neutral,” citing concerns regarding its premium valuation and the potential impact of U.S. government shutdowns on revenue. Still, he raised his price target to $42 from $35, indicating ongoing optimism.

Corporate Interest and Future Potential

The interest in quantum computing extends beyond individual investors, as banks and corporations recognize the potential of this technology. Last month, JPMorgan Chase announced plans to invest up to $10 billion in sectors deemed strategically important, including quantum computing. Furthermore, in September, IBM and HSBC revealed their collaboration in developing a new algorithmic bond trading platform utilizing quantum-based technologies, further fueling investor enthusiasm.

Reports have also surfaced indicating that the U.S. government may consider injecting additional funding into quantum computing in exchange for equity stakes. A U.S. Department of Commerce official confirmed to Reuters that it is “not currently negotiating” such arrangements. Nevertheless, while quantum computing companies have demonstrated remarkable stock gains, experts urge caution. A report by McKinsey suggests that the total market value could surpass $100 billion, but the technology is still in its early stages.

Portfolio manager Rick Bradt of Neuberger Berman noted the excitement surrounding quantum computing, stating, “It’s the holy grail of computing; the use case is undeniable, and undeniably awesome.” Yet, he acknowledged significant uncertainty regarding the timing of widespread adoption and practical implementation.

As investors navigate this volatile landscape, the future of quantum computing remains both promising and uncertain, highlighting the need for careful assessment in a rapidly evolving market.