Pure-Play Quantum Computing Stocks Continue To Decline - Here's Why

Photo by Nicolas Arnold on Unsplash
 

The quantum computing industry is a rapidly evolving and expanding field that is expected to experience a compound annual growth rate of 36.9% between now and 2030 with an estimated 5,000 quantum computers operational by then. That being said, however, there will be bumps along the way and last week the 4 pure-play constituents in our Pure-play Quantum Computing Stocks Portfolio declined sharply.
 

What Is Quantum Computing?

Computers currently operate on a binary system that is equipped with chips that use bits to perform computations but these bits can only show a value of zero or one and, as a result, it takes a lot of zeros and ones arranged in specific orders for a computer to do anything. (Check out this video on Quantum Computing: 4 Things You Need to Know.)

QCs, however, operate with subatomic particles that use quantum bits (qubits) to allow the particles to exist simultaneously in more than one state which increases processing speeds dramatically – and quicker processing speeds mean that computers can tackle more complex problems, which will improve predictive analytics, pattern recognition and complex optimization tasks.

There are almost 200 companies primarily focused on QC Software, according to The Quantum Insider, and just over 20 companies worldwide working on QC Processors and Chips. Of those 20+ companies only 4 companies are researching and developing quantum computers exclusive of anything else.
 

Our Pure-play Quantum Computing Stocks Portfolio

All four pure-play quantum computing stocks — IonQ (IONQ), Rigetti (RGTI), D-Wave (QBTS), and Quantum Computing Inc. (QUBT) — sold off heavily (-6.5%, on average) week ending February 6th due to a perfect storm of macro risk‑off, tech‑wide de‑risking, valuation fatigue, and renewed skepticism about quantum timelines.

Below are how the above stocks, constituents in our Pure-play Quantum Computing Stocks Portfolio, performed last week, in descending order, and YTD, the focus of each, their market capitalization and specific catalysts contributing to the change in their stock price last week, as follows:

1. Quantum Computing Inc. (QUBT): up 1.7% last week; down 8.1% YTD 
   • Focus: specializes in photonic qubits that offer a number of key advantages over trapped ions or superconducting qubits
   • Market Capitalization: $2.1B
   • Catalysts: 
     • QUBT had no positive news during this period, and In a risk‑off environment, the absence of catalysts becomes a catalyst in itself.
2. D-Wave Computing (QBTS): down 2.4% last week; down 20.8% YTD 
   • Focus: specializes in quantum annealing technology
   • Market Capitalization: $7.7B
   • Catalysts:
     • Even though D‑Wave had some positive news (FAU system sale, QCaaS deal), investors remained focused on financial concerns about dilution and cash usage..
3. Rigetti Computing (RGTI): down 2.5% last week; down 25.1% YTD
   • Focus: specializes in superconducting qubit technology and has developed a suite of software tools and algorithms for programming and simulating quantum computations
   • Market Capitalization: $5.8B
   • Catalysts:
     • Rigetti’s sell‑off was driven by a high‑profile short report by Wolfpack Research targeting IONQ that dragged down the entire quantum computing sector and, specifically, disclosed a delay in a major internal system milestone that investors interpreted it as a setback in Rigetti’s roadmap and competitiveness and this internal negative development compounded the external shock causing RGTI to fall harder than some peers.
4. IonQ (IONQ): down 12.5% last week; down 22.0% YTD 
   • Focus: building a network of quantum computers accessible via the cloud using trapped-ion technology in its processing units which relies on suspending ions in space using electromagnetic fields, and transmitting information through the movement of those ions in a “shared trap”.
   • Market Capitalization: $12.4B
   • Catalysts:
     • The primary and overwhelming driver was a high‑profile short report released by Wolfpack Research,  accused IonQ of building its business on political earmarks rather than genuine technological merit and questioned the credibility of IonQ’s technology and commercialization path and this triggered a rapid sentiment collapse.
     • In addition, once the short report triggered the initial drop, systematic flows kicked in with high‑volume selling signaling quant and momentum‑driven liquidation and the break below key moving averages added technical pressure which turned a fundamental shock into a multi‑day cascade.

 

Summary

The Portfolio went down 6.5% w/e February 6th and is now down 19.9% YTD.

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