2 Scorching-Hot Quantum Computing Stocks That Can Plunge Up to 80%, According to 1 Wall Street Analyst

Market Trends and Performance - The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have rallied to multiple record-closing highs in 2024, driven by catalysts such as stock splits, strong corporate earnings, and political events [1][2] - Quantum computing is emerging as the next major trend on Wall Street, potentially surpassing the current focus on artificial intelligence (AI) [2] Quantum Computing Overview - Quantum computing utilizes quantum mechanics to solve complex problems that traditional computers cannot, with the ability to manipulate quantum bits (qubits) that exist in multiple states simultaneously [3] - The technology has the potential to create up to $850 billion in economic value globally by 2040, with applications across various industries including AI, pharmaceuticals, and energy management [3][4][5][6][7] Industry Applications - Quantum computing can enhance AI by enabling faster data processing, quicker image recognition, and expedited machine learning through quantum parallelism [5] - In pharmaceuticals, quantum computing can simulate molecule interactions, potentially leading to breakthroughs in drug development and treatments for hard-to-treat diseases [6] - In energy management, quantum computers can optimize energy consumption, storage, and forecast renewable energy needs more accurately [7] Company Performance and Growth - IonQ and Rigetti Computing, two leading quantum computing companies, have seen their stock prices rise by 374% and 802% respectively over the trailing six months as of January 19 [8] - IonQ's sales are projected to nearly double in 2024, with a consensus forecast for 100% revenue growth in 2025 [9] - Rigetti Computing offers quantum computing systems and professional services, with both companies showing sustained double-digit sales growth potential [10] Challenges and Risks - Despite the optimism, some analysts predict significant declines in stock prices for IonQ and Rigetti Computing, with potential drops of 54% and 80% respectively [11] - Quantum computing faces challenges in scaling and demonstrating sustainable operating models, with both companies reporting significant net losses and cash burn [14][15][16] - Historical trends suggest that next-big-thing technologies often experience early-stage bubble-bursting events, and quantum computing is still in its nascent stages [12][13][17]