Shares of D-Wave Quantum (QBTS 23.29%) are soaring on Monday, up 25.2% as of 1:59 p.m. ET. The spike comes as the S&P 500 (^GSPC 1.56%) and the Nasdaq Composite (^IXIC 2.21%) both showed strong gains.
The quantum computing stock is flying after JPMorgan Chase said it plans to deploy up to $10 billion across several industries, including quantum computing, as part of a sweeping national security investment program it calls the Security and Resiliency Initiative.
In a statement, CEO Jamie Dimon emphasized the program's importance, saying, "Our security is predicated on the strength and resiliency of America's economy. America needs more speed and investment."
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D-Wave's valuation is sky-high
I think investors are getting ahead of themselves. Pure-play quantum computing stock valuations are reaching levels divorced from reality; there is clearly an enormous amount of hype in the market at the moment. JPMorgan naming quantum directly shows that the technology is important, but it was just one of 27 areas of investment named and was listed under "frontier and strategic technologies."
D-Wave's $14 billion market cap is hard to justify, with sales last year of just $8.8 million. There is enormous potential in quantum computing, but it is just that at this point: potential.
