Photo by Nicolas Arnold on Unsplash
 

Introduction

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 had another sharp decline.
 

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 (-21.1%, on average) week ending November 14th due to a combination of disappointing earnings, widening losses, analyst downgrades, and rising recession fears and skepticism about the sustainability of the AI/quantum hype cycle..

Below are how the above stocks, constituents in our Pure-play Quantum Computing Stocks Portfolio, performed week-ending November 14th, in descending order, and MTD, the focus of each, their market capitalization and specific catalysts contributing to the change in their stock price last week, and a chart of the performance of the Portfolio YTD, as follows:

1. Quantum Computing Inc. (QUBT): DOWN 17.6% w/e Nov. 14th; DOWN 36.6% MTD
   • Focus: specializes in photonic qubits that offer a number of key advantages over trapped ions or superconducting qubits
   • Market Capitalization: $2.4B
   • Catalysts: 
     • The company’s Q3 earnings call on Nov 14th highlighted weak revenue trends and investor skepticism.
2. D-Wave Computing (QBTS): DOWN 20.0% w/e Nov. 14th; DOWN 36.3% MTD 
   • Focus: specializes in quantum annealing technology
   • Market Capitalization: $8.3B
   • Catalysts:
     • Investors were expressing concern about stretched valuations and weak macro signals and the tech selloff tied to AI bubble fears.
3. IonQ (IONQ): DOWN 20.4% w/e Nov. 14th; DOWN 24.4% MTD 
   • 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: $16.7B
   • Catalysts:
     • Investors worried that IonQ’s $16.7B market cap was unsustainable due to a massive Q3 net loss of $1.05 billion.
4. ​​​​​​​Rigetti Computing (RGTI): DOWN 24.5% w/e Nov. 14th; DOWN 42.4% MTD
   • ​​​​​​​Focus: specializes in superconducting qubit technology and has developed a suite of software tools and algorithms for programming and simulating quantum computations
   • Market Capitalization: $8.4B
   • Catalysts:
     • ​​​​​​​Analysts downgraded the stock, citing concerns about the valuation of RGTI in particular, and commercial viability of quantum computing in the near term, in general.
        

Chart Of Portfolio Performance
 

Source of Chart: PortfoliosLab.com

​​​​​​​Summary

The Portfolio went DOWN 21.1% w/e Nov. 14th and is now DOWN 33.4% MTD.

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