Although artificial intelligence (AI) has been Wall Street's biggest multiyear catalyst, it wasn't the hottest stock market trend in 2025. That title belongs to the rise of quantum computing.
Quantum computing pure-play stocks IonQ (IONQ +0.77%), Rigetti Computing (RGTI +6.03%), D-Wave Quantum (QBTS +8.01%), and Quantum Computing Inc. (QUBT +7.36%) have skyrocketed by up to 965% over the trailing year, as of Nov. 28.
Professional and everyday investors are well aware of the life-altering returns that game-changing technologies can bring to the table. For instance, the internet completely changed the way businesses market and sell their products and services, as well as paved the way for the retail investor revolution. Quantum computing, which uses specialized computers and the theories of quantum mechanics to solve complex problems that classical computers can't tackle, can be the next leap forward for businesses.
Image source: Getty Images.
But before quantum computing stocks have an opportunity to make this leap forward, history strongly suggests they'll be taking several steps back.
The quantum computing revolution gains steam
The excitement surrounding quantum computers primarily stems from their practical applications.
For instance, these specialized computers can be used to run rapid, simultaneous simulations of molecular interactions, helping drug developers better target deadly diseases. They can also be used to dramatically speed up the learning process of AI algorithms, which has the potential to make large language models useful much faster than anticipated. These are just two of numerous examples that have investors excited about the future of this technology.
Wall Street's institutional investors expect big things from quantum computing, too. Boston Consulting Group believes this hyped trend can create between $450 billion and $850 billion in global economic value by 2040. Though this is a wide-ranging estimate that leaves plenty of room for error, it signifies the lofty potential of this technology and the likelihood that there will be several winners.
NYSE: IONQ
Key Data Points
However, collaborations and the prospect of investments are what have really fueled gains in quantum computing pure-play stocks IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. in the latter half of 2025.
In mid-October, money-center goliath JPMorgan Chase announced its $1.5 trillion Security and Resiliency Initiative, a 10-year plan that'll see it "facilitate, finance, and invest in industries critical to national economic security and resiliency." Quantum computing was one of the 27 sub-areas initially identified by JPMorgan Chase.
IonQ and Rigetti have also landed some prestigious customers. Amazon's and Microsoft's respective quantum-cloud services, Braket and Azure Quantum, are both allowing their subscribers access to IonQ's and Rigetti's specialized computers. Clients can use this service to run simulations or test their quantum hardware.
While the long-term future for quantum computing and pure-play stocks may be bright, history points to a far more chilling outlook in the years to come.
Image source: Getty Images.
Quantum computing pure-play stocks can lose 80% (or more) of their value
Over the last 30 years, investors have had no shortage of next-big-thing trends and technologies to captivate their attention. Though every hyped trend promised a high-ceiling addressable market, there's only one trait, in hindsight, they all shared: the need for time to mature.
What historical precedent has shown time and again over the last three decades is that investors continually overestimate how quickly a new technology or innovation will gain widespread adoption and be optimized by businesses. Share price appreciation for companies on the leading edge of next-big-thing trends suggests near-instant adoption and optimization, with straight-line sales growth. But no game-changing innovation has ever followed this course.
Beginning with the internet, and followed by genome decoding, nanotechnology, 3D printing, blockchain technology, and the metaverse, tech-driven trends have all endured early stage bubble-bursting events. Unrealistic expectations drive these bubbles -- and we look to be witnessing the next bubble taking shape with quantum computing.
This is such a new technology that IonQ, Rigetti, D-Wave Quantum, and Quantum Computing Inc. are still in the process of commercializing their products. Based on estimates from select Wall Street analysts, it could take years before quantum computers are tackling practical problems faster and more cost-effectively than classical computers.
NASDAQ: RGTI
Key Data Points
History also shows that price-to-sales (P/S) ratios can be used to identify potential bubbles in the making. Before the dot-com bubble burst in March 2000, several companies that had been leading the charge peaked at trailing-12-month P/S ratios ranging from roughly 30 to 40. This arbitrary range has served as an unofficial line in the sand for bubbles ever since.
With quantum computing stocks still wet behind the ears, it should come as no surprise that their P/S ratios are well above the range that typically indicates a bubble that's waiting to burst. Even accounting for triple-digit annual sales growth three years into the future wouldn't pull IonQ, Rigetti Computing, D-Wave Quantum, or Quantum Computing Inc. out of bubble territory.
Based on what history tells us, a significant downside comes with the territory for businesses leading next-big-thing trends. Although these companies can thrive over the long term, bubble-bursting events are known to wipe away 80% (or more) of a company's value on a peak-to-trough basis.
When the metaverse bubble popped, Meta Platforms' shares fell by approximately 80% from their highs. Amazon and Cisco Systems shed around 90% of their value from their respective peaks during the dot-com bubble. Meanwhile, 3D Systems stock has collapsed 98% since the 3D printing bubble burst.
Even though history doesn't repeat to a "t" on Wall Street, it often rhymes. If this is the case, yet again, quantum computing pure-play stocks IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. can all plunge 80% or more from their respective all-time highs.
