There has been considerable buzz around quantum computing stocks over the past several years, as many investors have hopped on the hype train for this emerging technology, which promises improved artificial intelligence (AI) models, new pharmaceuticals, and advancements in materials science.
That has led to the share prices of some companies to soar, including Quantum Computing Inc.'s (QUBT 7.08%), which has seen a staggering 600% increase over the past three years.
Despite those impressive gains, there are a few important reasons why Quantum Computing Inc., also called QCi, likely won't deliver similar returns over the next three years -- and why investors may want to steer clear of this stock for a while.
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1. The company is burning through cash and generating few sales
All companies trying to establish themselves in an up-and-coming market have to spend heavily. This is even more important when it comes to investing in new technologies, which often take years of research and development before a viable product emerges.
However, even with this in mind, investors should be cautious about QCi's spending. The company reported an operating loss of $10.4 million in the third quarter -- and had just $384,000 in sales. Even by the standards of a young growth stock, that's a very large gap between what QCi is losing and its sales.
QCi has $1.6 billion in cash, which will enable the company to continue investing heavily in the development of its room-temperature quantum computing technology. However, I think investors should take the company's low sales and high spending at face value. The quantum computing market is still new, and QCi generates nearly no revenue from it -- and that's likely to be the case for at least the next few years as quantum computing companies try to prove their worth.
2. Investors are losing their appetite for risky investments
In addition to QCi's nominal revenue, I believe it's essential for investors to recognize that the substantial gains experienced by QCi and other quantum computing stocks are largely driven by market euphoria rather than any other factor.
A very strong bull market has been underway for years, fueling speculation in high-risk companies, including QCi and other quantum computing stocks. The excitement for AI stocks has spilled over into crypto and quantum computing, helping to push the S&P 500 (^GSPC 0.43%) up 79% over the past three years.
NASDAQ: QUBT
Key Data Points
But some of the excitement appears to be coming to an end. Over the past year, some investors have shifted away from more speculative investments, including cryptocurrencies and some quantum computing stocks.
The result has been that QCi's shares are down 42% over the past year. Part of the shift away from some risky investments may be fueled by the economy showing signs of slowing down. For example, layoffs in the U.S. reached a five-year high in 2025, and unemployment crept up to 4.6% in November.
In short, investors' appetite for risk is already shifting, and without solid sales and earnings to back up QCi's high-flying gains, I think the stock could fall further in the coming years.
3. Quantum computing is still years away from true real-world applications
The CEO of fellow quantum computing company Rigetti Computing said on the company's Q1 2025 call that Rigetti won't have meaningful commercial revenue for another three to five years. Alphabet has been similarly upfront, acknowledging that "useful" quantum computer are still five to 10 years away.
The point here is that investors may have become too excited about quantum computing stocks too early, with QCi being one of them. With many in the industry not expecting significant sales or practical uses from quantum computing for at least several more years, QCi's minimal revenue is unlikely to skyrocket anytime soon.
All this means investors will likely be better off staying on the sidelines of QCi stock for the next few years to see if it can generate meaningful sales and with its technology -- if it ever does.
