Wall Street currently predicts significant declines for two emerging quantum computing stocks, IonQ and Rigetti Computing. Analysts have warned investors of potential drops of up to 62% in the coming year. Despite an enthusiastic response to quantum technology, skepticism over its adoption remains prevalent.
Current Market Performance
- IonQ (IONQ): Recently delivered a return of 712% over the past year, with a market cap of $25.5 billion.
- Rigetti Computing (RGTI): Experienced an astonishing 5,940% return, boasting a market cap of $15.3 billion.
Analysts’ Projections
Recent assessments by analysts indicate caution regarding these stocks’ future performance:
- Joseph Moore from Morgan Stanley has set a price target of $32 for IonQ, suggesting a potential decline of 59% from its October 9 closing price.
- Troy Jensen of Cantor Fitzgerald raised Rigetti’s price target to $18, indicating potential downside of 62% given its current share price exceeds $47.
Future of Quantum Computing
Despite fears of a potential bubble, the market holds out hope for quantum computing. Proponents argue these technologies could create substantial economic value over the next few decades.
– The Quantum Insider forecasts quantum computing will generate $1 trillion in economic benefits by 2035.
– Boston Consulting Group estimates economic value between $450 billion and $850 billion by 2040.
Key Factors Influencing Market Sentiment
Factors contributing to skepticism about IonQ and Rigetti include:
- Regulatory hurdles and industry challenges.
- High price-to-sales (P/S) ratios, with IonQ at 337 and Rigetti at 1,506, suggesting unsustainable premium valuations.
- The anticipated entry of larger technology companies into the quantum computing arena, which could impact competitive advantages held by IonQ and Rigetti.
Investors are urged to remain cautious as the advancements in quantum computing continue to unfold. The market may experience corrections as realities catch up with ambitious growth forecasts.
