Quantum Computing Stocks Plummet; Investors Should Exercise Caution
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 17 hours ago
0mins
Should l Buy GOOGL?
Source: Fool
- Quantum Stocks Decline: IonQ, Rigetti Computing, and D-Wave Quantum have seen their stock prices drop by 34%, 32%, and 32% year-to-date, respectively, indicating a lack of market confidence in pure-play quantum stocks, prompting investors to exercise caution.
- Valuations Detached from Reality: Despite the decline, IonQ trades at a staggering 99 times sales, D-Wave at 217 times, and Rigetti at 600 times, highlighting the minuscule revenue base of these companies and their accelerating losses.
- Bleak Commercialization Outlook: An MIT report suggests that large-scale commercial applications for quantum computing are still years away, with Morningstar estimating early commercialization at 5 to 10 years and general-use quantum computing potentially 20 years out, creating long-term uncertainty for investors.
- Smarter Investment Choices: Alphabet and IBM offer robust quantum research programs, with Alphabet generating over $400 billion in annual revenue and IBM achieving $67.5 billion last year, both capable of funding quantum R&D from profitable operations, thus reducing investment risks associated with extreme valuations of pure plays.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise
33 Analyst Rating
26 Buy
7 Hold
0 Sell
Strong Buy
Current: 311.760
Low
305.00
Averages
374.25
High
400.00
Current: 311.760
Low
305.00
Averages
374.25
High
400.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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