If you think artificial intelligence (AI) stocks have been hot in 2025, you haven't been paying close enough attention to the investor hype surrounding the rise of quantum computing.
Over the trailing year, ended Oct. 30, shares of quantum computing pure-play stocks IonQ (IONQ +7.03%), Rigetti Computing (RGTI +8.09%), D-Wave Quantum (QBTS +16.16%), and Quantum Computing Inc. (QUBT +5.72%) have respectively gained 262%, 2,810%, 3,060%, and 1,130%. Rallies of this magnitude tend to inspire the fear of missing out (FOMO) in retail investors.
But while the quantum computing revolution offers plenty of intrigue on paper, select Wall Street analysts have taken a different approach with these pure-play stocks. If their price target prognostications prove accurate, these clear-as-day winners could lose up to 58% of their respective value over the coming year.
Image source: Getty Images.
Quantum computing is rivaling AI as Wall Street's hottest trend
Quantum computing involves the use of specialized computers reliant on the theories of quantum mechanics to solve highly complex problems that classical computers either can't do, or wouldn't be able to complete for eons. The ability for quantum computers to conduct numerous simultaneous calculations, as well as perform calculations faster than the world's top supercomputers, opens the door to a host of possibilities.
One of the more exciting use cases for these computers would be to run molecular interaction simulations to help drug developers devise a best course of action when tackling treatments for deadly diseases.
Quantum computers can also, theoretically, be used to rapidly speed up the learning process of AI algorithms, which can expedite the utility and proficiency of large language models.
Another reason IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. shares have soared is because we're witnessing some early stage usage by brand-name businesses.
NYSE: IONQ
Key Data Points
For instance, Amazon and Microsoft collectively account for more than half of global cloud infrastructure service spend with their respective platforms, Amazon Web Services (AWS) and Microsoft Azure. Both companies offer subscription quantum cloud computing services hosted on their respective platforms, AWS and Azure, which provide access to IonQ's and Rigetti's quantum computers.
Investors are likely enticed by pie-in-the-sky growth expectations for quantum computing, as well. Boston Consulting Group believes this technology will create $450 billion to $850 billion in worldwide economic value by 2040, with online publication The Quantum Insider looking for $1 trillion in global economic value creation come 2035.
But in spite of these catalysts, not all Wall Street analysts are on board with the parabolic rally quantum computing stocks have enjoyed.
Image source: Getty Images.
IonQ, Rigetti Computing, and D-Wave Quantum stocks can plummet
Keeping in mind that Wall Street analyst price targets tend to be reactive rather than proactive, select analysts are forecasting significant downside:
- IonQ: Morgan Stanley analyst Joseph Moore reiterated his price target of $32 for IonQ in September, which takes into account the company's pole position in qubit technology, but also factors in various regulatory hurdles and expansion potholes that it'll have to contend with. This price target implies 47% downside, based on where IonQ stock ended the trading session on Oct. 30.
- Rigetti Computing: Cantor Fitzgerald's Troy Jensen pointed to Rigetti's promise following the release of its second-quarter operating results. However, he also opined in his research note, where he raised the company's price target to $18 per share, that Rigetti is still "four years" from the point where quantum computers can solve practical problems faster than classical computers. Jensen's price target would represent 58% downside from the Oct. 30 close.
- D-Wave Quantum: Cantor Fitzgerald's Jensen also provides the low-water mark for D-Wave Quantum, with a $20 per share price target. Similar to Rigetti, he recognized the long-term implications of this technology, but pointed to current steep valuations, as well as full-scale quantum capabilities being "years away" in his research note to investors. Jensen's $20 price target, if accurate, would lead to 45% downside in D-Wave Quantum stock.
The primary hurdle that these Wall Street analysts touched on is the need for quantum computing to mature as a technology.
NASDAQ: RGTI
Key Data Points
Since the advent and proliferation of the internet more than three decades ago, no game-changing technology or hyped trend has been able to avoid an eventual bubble-bursting event. These events occur because investors consistently overestimate the early innings utility and adoption rates of new innovations, without realizing they need time to mature.
Aside from the prior example of IonQ and Rigetti having their specialized computers accessible via Amazon's Braket service and Microsoft's Azure Quantum service, there are very few real-world examples these solutions being commercialized. It's also not apparent if the investments being made by businesses in quantum computers and quantum solutions are generating a positive return on investment. This all points to a bubble being formed and, eventually, bursting.
The other undeniable issue is the aforementioned steep valuations associated with quantum computing stocks.
NYSE: QBTS
Key Data Points
In the months and years leading up to the bursting of the dot-com bubble, companies on the leading edge of the internet revolution peaked at price-to-sales (P/S) ratios in the range of (roughly) 30 to 40. As of the closing bell on Oct. 30, the trailing-12-month P/S ratios of Wall Street's quantum computing darlings were as follows:
- IonQ: 263
- Rigetti Computing: 1,361
- D-Wave Quantum: 414
Even basing the P/S ratio on sales forecasts two to four years into the future doesn't bring any quantum computing stock below the P/S ratio range of 30 to 40, which has consistently proven to be unsustainable over an extended period.
Though these low-water price targets are currently outliers, they would appear to have a good chance of becoming reality at some point in the future.
