It's been a hard year for investors so far. As of market close on June 5, the S&P 500 and Nasdaq Composite indexes each have breakeven returns on the year. While this makes it incredibly difficult to make money in the stock market, there have been some pockets during which investors made out well if they chose to engage with higher-than-usual volatility.
By now, you may have come across a new acronym floating around financial circles called the "TACO" trade. Below, I'll detail what this means and why it's important.
From there, I'll dig into one of the new, hot areas fueling the artificial intelligence (AI) narrative: quantum computing.
Could quantum computing stocks be a good way to play the TACO trade? Read on to find out.
What is the TACO trade?
Even though the S&P 500 and Nasdaq are both flat on the year, the image below illustrates that there have been some pronounced dips and sharp rises across both indexes throughout 2025. The catch is that these volatile movements have been incredibly fleeting.
The term "TACO trade" is a cheeky acronym that stands for "Trump always chickens out." Basically, whenever the President voiced some tough rhetoric on his new tariff policies, the markets plummeted. However, when he subsequently eases some of the pressure on the tariff talking points, the markets roar again.
In summary, the TACO trade is simply a new version of buying the dip when stock prices become abnormally depressed.
Image source: Getty Images.
Are quantum computing stocks a good buy right now?
Two of the most popular quantum computing stocks in the market right now are IonQ (IONQ -2.16%) and Rigetti Computing (RGTI -0.36%). During 2024, shares of IonQ soared by 237% while Rigetti stock climbed by a jaw-dropping 1,450% -- both of which completely dominated the broader market.
This year has been a different story, though. As of closing bell on June 5, shares of IonQ and Rigetti Computing have plummeted by 12% and 28%, respectively.
Given these declines, is now a good opportunity to buy quantum computing stocks?
To answer that question, smart investors understand that valuation needs to be a consideration. Per the chart below, Rigetti Computing and IonQ boast price-to-sales (P/S) ratios that seem incongruent with the company's underlying fundamentals.
RGTI PS Ratio data by YCharts
Looked at another way, IonQ and Rigetti Computing have generated a combined revenue of roughly $50 million over the last 12 months -- all while posting a net loss of $460 million between the two businesses.
Given the nominal sales figures and hemorrhaging losses, it's hard to justify the valuation multiples pictured above.
While Rigetti and IonQ have each been on a monster run from a share price perspective, both of these companies appear to be riding high on a bullish quantum computing narrative. In other words, their trading levels are not rooted in the actual performance of the business but rather in a broader macro viewpoint that quantum computing could be a good opportunity in the long run.
Keep the big picture in focus
The big takeaway here is that even though shares of IonQ and Rigetti are down on the year, their respective valuations make it clear that neither of these companies is a good "buy the dip" candidate. Rather, even with their underperformance throughout the year, each stock remains overvalued.
For these reasons, I would not chase any sell-offs in these quantum computing stocks as the TACO trade continues to evolve. My suspicion is that both IonQ and Rigetti will experience some continued valuation compression, and their share prices could very well keep spiraling downward.
