CNBC's Kate Rooney reports on the latest regarding quantum computing stocks.
Shares of quantum computing company IonQ (IONQ 5.48%) raced higher this week. The stock was up by 28.5% as of Friday morning, according to data provided by S&P Global Market Intelligence.
For the last few months, a technology known as quantum computing has started receiving a lot of attention. As is often the case when new subject matter enters the spotlight, people try to figure out how to invest in this technology, which will eventually support the artificial intelligence (AI) market.
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Recently, Nvidia (NVDA 3.40%) CEO Jensen Huang made a head-turning, market-moving comment regarding his thoughts on quantum computing. Stocks in this space sold off in response.
I first believed the main competitive battle in quantum computing would involve how to generate qubits (units of information); IonQ's ion-trapping method or the supercomputing approach championed by Rigetti. It tuns out there's another battle involving how to build logic and solve problems; logic gates (used by IonQ and Rigettias well in traditional computing) versus D-Wave Quantum's (QBTS). Annealing is especially strong for optimization problems, which QBTS expects to comprise about 25% of quantum's total addressable market.
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In a highly speculative quantum computing market, it is judicious for investors to take a wait-and-watch approach before investing in Rigetti and IonQ stocks.
Quantum Computing Inc. (QUBT) is a pioneer in the quantum computing industry, combining hardware and software for comprehensive solutions, positioning it for long-term growth. Despite not yet generating significant revenue, QUBT's pilot programs and collaborations indicate strong commercialization efforts and potential market penetration. Valuation analysis suggests QUBT is undervalued, with significant growth potential, possibly yielding substantial returns over the long-term compared to the S&P 500 index.
Quantum stocks are highly volatile, making them risky for most investors, despite potential high returns for those who can time trade effectively. Nvidia's CEO Jensen Huang's mixed messages on quantum computing have caused significant stock price fluctuations, but the upcoming Quantum Day could drive further excitement. Rigetti Computing, Inc. offers the highest return potential among quantum stocks, but its high short interest and weaker balance sheet make it a risky investment.
After being pummeled to losses of 50% to 60% in the span of just a few days, quantum computing stocks surged higher on Tuesday with Rigetti Computing (NASDAQ:RGTI) rocketing 48% higher.
Nvidia CEO Jensen Huang's sobering assessment of quantum computing's timeline sent the space into a tailspin last week. During a question-and-answer session with analysts, Huang suggested that useful quantum computers were likely 15 to 30 years away.