Institutional Investors Piled Into IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. Stocks -- and They'll Likely Regret It

Core Insights - Quantum computing is emerging as a significant trend in 2025, with substantial stock price increases for companies in this sector [2][3] - Institutional investors have shown strong interest in quantum computing stocks, with notable net purchases during the third quarter of 2023 [4][5] - Despite the excitement, there are concerns about potential overvaluation and the maturity timeline of quantum computing technology [10][13] Institutional Investment Activity - Institutional investors collectively increased their holdings in quantum computing stocks significantly by September 30, 2023: - IonQ: 169.9 million shares (up 27.4% from June 30) - Rigetti Computing: 164.1 million shares (up 31.8% from June 30) - D-Wave Quantum: 182.3 million shares (up 16.1% from June 30) - Quantum Computing Inc.: 90.2 million shares (up 61.7% from June 30) [5] - The buying activity indicates a strong belief in the growth potential of quantum computing, despite the risks associated with high valuations [6][10] Market Performance and Growth Potential - Quantum computing stocks have experienced remarkable price increases over the past year, with IonQ up 69%, Rigetti Computing up 1,720%, D-Wave Quantum up 1,300%, and Quantum Computing Inc. up 299% [2] - The potential applications of quantum computing, such as enhancing AI algorithms and improving drug trial success rates, contribute to its attractiveness [7] - Projections suggest that quantum computing could generate up to $850 billion in global economic value by 2040, with all four mentioned stocks expected to achieve triple-digit sales growth by 2026 [9] Valuation Concerns - Historical trends indicate that new technologies often face bubble-bursting events, raising concerns about the sustainability of current stock prices in the quantum computing sector [12][13] - Current price-to-sales (P/S) ratios for quantum computing stocks are considered to be in bubble territory, with estimates suggesting they will not align with future sales growth [16] - The presence of established tech giants like Microsoft and Alphabet developing their own quantum technologies may threaten the competitive advantage of pure-play quantum computing stocks [17]