Rigetti Computing, Inc. (RGTI) and D-Wave Quantum Inc. (QBTS) saw significant declines, with both stocks down nearly 30% today.
Rigetti designs quantum computers and offers cloud-based quantum services, while D-Wave develops quantum computing systems and provides software, cloud services and professional solutions for various industries.
Why Rigetti (RGTI) and D-Wave Quantum Inc. (QBTS) plummeted today?
On December 9, Alphabet Inc. introduced (GOOGL) the Willow quantum chip, a major milestone in quantum computing. The announcements gave a significant boost to quantum computing stocks such as Rigetti and D-Wave Quantum (QBTS), which rose approximately 140% and 93% between the December 9 and December 18 market close.
Both stocks are facing sharp declines today, mainly because they appear to have become bubble stocks. These companies experienced huge price increases following Google’s breakthrough in quantum computing, sparking optimism among investors. However, as reality sets in, investors are realizing that practical, scalable applications of quantum computing are still years away, requiring billions in continued investment. As a result, these stocks are now seen as speculative and overvalued, with the possibility that these companies will not survive, while tech giants like Google (GOOGL) are more likely to find success in this area.
In a post on social media platform For example, IonQ (IONQ) allocated $33 million to R&D last quarter, and Rigetti spent $12 million, amounts that are relatively small next to the much larger R&D expenditures of tech giants like GOOGL.
While we recognize the potential of RGTI and QBTS as an investment, our belief lies in the belief that AI stocks hold greater promise for delivering higher returns in a shorter time frame. If you’re looking for an AI stock that’s more promising than QBTS but trades at less than five times earnings, check out our report on the cheapest AI stocks.
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