We recently published 10 Stocks Crash Harder than Wall Street. IonQ Inc. (NYSE:IONQ) is one of the worst performers on Wednesday. IonQ extended its losses on Wednesday, shedding 6.63 percent to close at $72.41 apiece, as investors continued to unload positions following a $2 billion share sale that resulted in the dilution of existing stocks. Late last week, IonQ Inc. (NYSE:IONQ) announced the successful raising of $2 billion in fresh funds from a share sale program, covering 16.5 million shares at $93 a ...

Core Viewpoint - The discussion emphasizes the critical need for power in the context of expanding data centers, particularly in Texas, and highlights the potential of photonics and quantum computing to address these challenges [1][4][6]. Power Demand and Supply - Open Air requires 20 gigawatts of power, costing $16 billion for every 2 gigawatts [1] - Texas is experiencing a grid problem, complicating the expansion of data centers [3] - Oracle's co-CEOs noted that the challenge lies in supply rather than demand, as data centers cannot be built quickly enough to meet the growing needs [4] Photonics and Quantum Computing - Cohere is focused on photonics for quantum computing, which adds complexity to the power requirements [6] - The company has launched a strategy called macro cycle opportunities, targeting themes such as space, robotics, quantum, and nuclear, all integrated with AI [6] Investment Strategies - Quanta Services has a $36 billion backlog for modernizing existing power grids [8] - The portfolio construction includes established leaders (40-50%), enablers (20-25%), and speculative names (10-20%) to mitigate risk [10] Market Dynamics - The expectation for transformation in technology is significant, with predictions of more change in the next decade than in the last century [9] - Meta's pivot to AI and its impact on revenue generation remains uncertain, despite attracting high-level talent [14][15]

Core Insights - Taiwan Semiconductor Manufacturing Company (TSMC) reported a net profit increase of 39%, indicating strong performance during the chip boom and boosting investor confidence in the AI sector [2][3] - TSMC produces over 90% of critical chips used globally, highlighting its dominant position in the semiconductor industry [3][4] - The company is experiencing a growth outlook of 30%, supported by ongoing capital expenditures and expansion efforts in Japan and the US [4][15] Company Differentiation - TSMC has established a significant competitive advantage over other semiconductor manufacturers, diversifying its offerings and maintaining a leading position in the market [6][7] - The company is advancing into 3-nanometer technology and enhancing its packaging capabilities, which are crucial for future chip development [7] Market Dynamics - The semiconductor market is broadening, with multiple companies contributing to AI accelerator production, reducing reliance on a single player like Nvidia [9] - There is a growing demand for AI infrastructure, which presents substantial investment opportunities beyond just chip manufacturing [12][18] Future Outlook - The persistent demand for TSMC's chips is driven by increased capital expenditures from major corporations like Microsoft, Amazon, and Apple, all investing in AI technologies [16][18] - Future growth areas include supercomputing, quantum computing, and AI applications across various sectors such as healthcare and defense [17][18] Industry Challenges - Potential headwinds include geopolitical tensions, currency risks, and the need for onshore semiconductor production to enhance supply chain security [13][14][20] - The high bandwidth memory space may become a production bottleneck, impacting the overall semiconductor supply chain [20]

Core Insights - IonQ is positioned as a stronger investment compared to its quantum peers, with advancements in technology and funding supporting its growth trajectory toward scalable quantum computing [1][3][4] Funding and Acquisitions - IonQ raised $2.0 billion in equity in October 2025, which, while dilutive in the short term, reflects strong institutional confidence and provides capital for commercialization and scaling production [3][7] - The acquisition of Oxford Ionics enhances IonQ's intellectual property in trapped-ion systems, crucial for developing fault-tolerant quantum computing [3][7] Technological Leadership - IonQ's gate-based trapped-ion architecture supports a wider range of quantum algorithms and has shown advancements in gate speed and fidelity, positioning it as a leader in the field [5][6] - The company has made significant progress in quantum chemistry simulation and expanded partnerships in AI and materials research, indicating a shift towards scalable revenue opportunities [3][4] Comparative Performance - IonQ is projected to achieve a 37.8% earnings growth and a 115.1% revenue increase in 2025 compared to 2024, contrasting with Rigetti's expected earnings growth of 75% despite a revenue decline of 19.7% [6][7] - D-Wave Quantum, while showing customer traction, operates on a more specialized architecture that limits its algorithmic flexibility compared to IonQ's offerings [4][6] Valuation Metrics - IonQ's forward 12-month price/sales (P/S) ratio stands at 141.63, significantly higher than the industry average of 4.38, yet lower than its peers Rigetti and D-Wave [10]

Group 1 - D-Wave Quantum's shares fell by 11.5% on Thursday after a significant price surge, closing at an all-time high with a 4,390% increase over the past 52 weeks [1][7] - The recent rise in D-Wave's stock is attributed to substantial capital investments and technological advancements in the quantum computing sector, benefiting the entire industry [3] - D-Wave received an innovation award from Fast Company and completed a large system sale to Swiss Quantum Technology SA, further boosting its stock price [4] Group 2 - Despite the positive developments, D-Wave remains deeply unprofitable, with a stock trading at 628 times trailing sales, making it appear expensive compared to peers like Palantir Technologies and Nvidia [5] - The stock has increased by 533% over the past six months, raising concerns about the sustainability of its valuation amidst the current quantum computing euphoria [6] - Analysts suggest that profit-taking is a natural response to the unsustainable valuation levels, indicating potential for a sharp correction in the future [8]

Core Insights - IBM is set to report Q3 2025 earnings on October 22, with sales and earnings estimates at $16.09 billion and $2.43 per share respectively [1][7] - Earnings estimates for IBM have improved to $11.13 for 2025 but declined to $11.95 for 2026 over the past 60 days [1] - The company has a positive earnings surprise history, averaging 6.29% over the last four quarters [2][3] Earnings Performance - IBM achieved a 6.06% earnings surprise in the last reported quarter [2] - The company has an Earnings Surprise Prediction (ESP) of +2.20% and a Zacks Rank of 2 (Buy) [4] Growth Drivers - IBM's innovation strategy includes new AI, hybrid cloud, and quantum initiatives, which are expected to support growth [7] - The launch of IBM Power11 servers offers significant performance improvements, enhancing hybrid deployment capabilities [8] - Neudesic's renewed partnership with Microsoft for Cloud Security Specialization strengthens IBM's security solutions in hybrid environments [9] - Collaboration with AMD aims to develop scalable, open-source platforms for quantum computing [10] Market Position - IBM's Software segment is projected to generate revenues of $7.52 billion, while the Consulting segment is expected to generate $5.17 billion [11] - The company has gained 19.9% over the past year, trailing behind industry peers like Oracle and Microsoft [12] Valuation Metrics - IBM's shares are trading at a forward P/E ratio of 23.85, slightly above the industry average of 23.81 [13] Strategic Initiatives - IBM is focusing on AI capabilities through the watsonx platform, which is gaining traction in the market [16] - Strategic collaborations with industry leaders enhance prospects in cloud infrastructure and quantum computing [17] - The company is experiencing strong demand trends in hybrid cloud and automation, which are expected to drive growth in the Software segment [19]

Core Insights - Rigetti Computing (RGTI) has experienced a remarkable 264% year-to-date increase, indicating potential commercial traction for its technology [1][9] - Key catalysts for this surge include new purchase orders for its 9-qubit Novera systems and a contract with the U.S. Air Force Research Laboratory, suggesting growing demand beyond research [1][9] - Rigetti's advancements in chiplet-based architecture have renewed investor confidence in its scalability and cost efficiency, positioning it as a more competitive player in the quantum computing sector [1] Company Developments - Rigetti is expanding its global presence through collaborations with India's Centre for Development of Advanced Computing (C-DAC) and Montana State University, enhancing its credibility and opportunities in quantum cloud services [2] - Despite the strong momentum, Rigetti's revenue base remains small, and the company continues to face losses, raising questions about its ability to sustain growth [3][9] Peer Updates - IonQ (IONQ) has made strategic acquisitions to enhance its quantum roadmap, improving system scalability and performance while expanding its intellectual property portfolio [4][5] - Arqit Quantum (ARQQ) is focusing on quantum-safe encryption and has joined the Oracle Defense Ecosystem, which strengthens its position in secure networks [6][7] Financial Performance - Rigetti's shares have outperformed the industry, gaining 263.8% compared to the industry's 17% growth [8] - The company currently trades at a price-to-book ratio of 32.88, which is above the industry average, and carries a Value Score of F [11] - The Zacks Consensus Estimate for Rigetti's 2025 earnings suggests a significant 86.1% increase from the previous year [12]

Key Points JPMorgan Chase announced plans to invest $10 billion into companies it believes are imperative to U.S. national economic security. One sector mentioned for potential investment was quantum. 10 stocks we like better than Rigetti Computing › Since the close of trading last week, shares of Rigetti Computing (NASDAQ: RGTI) had risen nearly 10%, as of 11:49 a.m. ET Thursday. The move is being driven by an announcement from JPMorgan Chase earlier in the week. More investment into quantum Quan ...

Core Viewpoint - Quantum concept stocks have experienced a decline, with several companies showing significant drops in their stock prices [1] Group 1: Stock Performance - Rigetti Computing (RGTI.US) has fallen over 13% [1] - Quantum Computing (QUBT.US) has decreased by more than 4.7% [1] - IonQ Inc (IONQ.US) has dropped over 6% [1] - SEALSQ Corp (LAES.US) has seen a decline of more than 8% [1]

Valuation Concerns - The Shiller PE ratio of the S&P 500 is currently just under 40, indicating that investors are paying excessively for historical earnings [2][3] - Historical benchmarks show that when the Shiller PE exceeds 32, significant market downturns have followed, including the Great Depression, the Dot-Com Bubble, and the 2021-2022 correction [4][6][9] Historical Context - In September 1929, the Shiller PE reached approximately 32.6, leading to an S&P 500 decline of over 83% during the Great Depression [6] - The Shiller PE peaked at 44.19 in December 1999, resulting in a 49% decline in the S&P 500 from its high in March 2000 to its low in October 2002 [8] - The Shiller PE was around 38.6 in late 2021, with the S&P 500 falling 25% from its peak in January 2022 to its low in October 2022 [9] Current Market Implications - The current S&P 500 level of 6,671 suggests potential downside risks of 25-50%, with historical corrections indicating similar valuation levels [10][13] - Extreme valuations are compounded by various macroeconomic challenges, including persistent inflation, high interest rates, trade war uncertainties, and rising US debt [11][14] Investment Strategies - The Trefis High Quality Portfolio has outperformed its benchmark by generating returns exceeding 105% since inception, suggesting that diversified strategies may mitigate risks associated with high valuations [5][18] - The Trefis Reinforced Value (RV) Portfolio has also surpassed its all-cap stocks benchmark, indicating that a diversified approach can leverage favorable market conditions while limiting losses [18] Market Dynamics - The current market environment is characterized by a confluence of risks that could amplify one another, creating a "perfect storm" scenario for potential downturns [11][22] - Despite historical evidence indicating significant downside risk, markets have often defied expectations, raising questions about whether current valuations are justified or indicative of speculative excess [19][20]