Quantum Computing Stocks Face Setback After Nvidia CEO’s Prediction

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Quantum computing stocks experienced a significant downturn on Wednesday, ending a year-long upward trend, following comments made by Nvidia CEO Jensen Huang during his CES 2025 keynote. Huang, who is a leading figure in the tech industry, cast a long shadow on the near-term prospects of quantum computing by stating that its practical, widespread application is likely two decades away. This statement has led to a pause in the sector’s progress, which had already been fueled by high expectations and substantial investments in quantum computing technology.

Huang’s cautious outlook suggests that while quantum computers have the potential to perform groundbreaking calculations, their practical use remains limited to very specific, niche applications for the foreseeable future. He provided a broad timeline, stating that “if you kind of said 15 years… that’d probably be on the early side,” and that 30 years could be seen as the more extended horizon. However, he indicated that the 20-year mark is a reasonable estimate that many experts in the field might agree upon. This uncertainty about the technology’s timeframe has significantly impacted investor sentiment.

As a result, stocks of leading quantum computing firms such as Rigetti Computing, D-Wave Quantum, Quantum Computing, and IonQ all saw drastic declines, with each falling more than 40%. The cumulative market value of these companies dropped by over $8 billion, a stark contrast to the growth they had enjoyed earlier in 2024. These companies had experienced a meteoric rise in stock prices, with many of them tripling in value during the year, outpacing the more than twofold rise in Nvidia’s own stock. This surge was largely fueled by a high-profile breakthrough in quantum computing made by Google in December 2024, which generated significant excitement in the market.

Despite the setbacks, quantum computing remains a crucial area of interest, particularly due to its potential national security applications. Governments around the world are investing heavily in the technology, with the aim of leveraging quantum computing to enhance decryption capabilities for military and intelligence purposes. These strategic investments underline the long-term significance of the technology, even as it faces practical and financial hurdles in the short run.

The financial prospects for companies like IonQ and Rigetti reflect the emerging stage of the quantum computing industry. IonQ, which was valued at over $10 billion as of early January 2025, is expected to generate approximately $41.6 million in revenue for fiscal 2024, while Rigetti, with a market cap of around $4.4 billion, is anticipated to bring in just $11 million in annual revenue. These figures highlight the early-phase nature of the industry and the significant gap between the technology’s potential and its current revenue-generating capabilities.

Craig-Hallum analyst Richard Shannon, however, remains optimistic about the long-term outlook for quantum computing. He pointed out that while the immediate revenue figures may seem modest, there will likely be considerable government-related revenues in the coming years, particularly as quantum computing continues to evolve. Shannon also emphasized that investors concerned about the short-term financial challenges are overlooking the disruptive potential of quantum computing, especially in relation to traditional computing technologies. This disruption could have significant implications for companies like Nvidia, which stands to benefit from the advances in quantum computing over time.

In summary, while the sector is currently facing a setback due to Huang’s conservative outlook, the long-term promise of quantum computing remains intact, especially as governments continue to invest in it for strategic reasons. The industry’s trajectory may be slower than anticipated, but its potential to revolutionize fields like cryptography and computing infrastructure continues to fuel interest and investment in the space.