Stock markets for quantum computing companies experienced notable activity in October, capturing the attention of investors. However, since the beginning of November, this trend has dramatically reversed.
Various companies in this field Stock prices have plummeted, raising questions about the short-term sustainability of the technology. And whether this correction marks the end of speculative euphoria.
Concerns about the decline are palpable, with financial information service Perplexity Finance questioning whether this is a collapse similar to the dot-com collapse of the early part of this century.
According to the company, investors are now facing “the fundamental reality that sales are 200x to 900x, profits are zero, losses are mounting, and business profitability is still at least 15 to 30 years away.” Resetting this expectation In total, this represents a loss of more than $30 billion in market capitalization. It has evaporated from its mid-October high.
Specialized companies have recorded a notable decline. For example, Righetti Computing, which hit record highs in October, is down 54% in the last month, DWave Quantum is down 46%, and Quantum Computing is down 53%.
Only IBM briefly disrupted this trend this week by launching its Quantum Nighthawk processor with more than 120 qubits and 218 tunable couplers that enable 30% more complex circuits. Still, IBM stock fell from $342 to $306 in Friday trading.
The perfect storm and the fear of stagflation
Trader David Battaglia says there is a “perfect storm” in the market. “We’re seeing signs that it doesn’t fit into the traditional story. “This is not a simple fix,” he says. The analyst said that if this were a normal process of risk aversion, funds would flee to bonds and yields would fall, but the opposite is now being seen. “The market is selling everything,” he says.
Stocks, Bitcoin (BTC), and bonds are all falling at the same time, which he explains is unusual. The real “fear” isn’t a recession, he says, but stagflation (high prices without growth) because markets don’t believe U.S. inflation will go down. According to the CriptoNoticias Calculator, the price of Bitcoin is $96,000 at the time of publication of this article.
If no one buys government bonds because of inflation, the only solution for the Federal Reserve is to devalue the dollar, he explains. That’s why Battaglia concludes with the admonition: “Buying cheap or reduced prices is like sowing seeds before it rains.”
Future predictions for quantum computing
Despite the recent selloff, Bank of America has an optimistic long-term outlook regarding quantum computing. The company predicts this market will reach a value of approximately $4 billion in 2030.“While the potential for quantum computing is real, there are technical hurdles to its scalability that are currently being addressed,” analysts led by Wamsi Mohan wrote.
“We expect adoption to be high and prices to remain relatively stable during the early stages of adoption. Once this technology is integrated and standardized at scale, we should see significant revenue growth,” Mohan said.
Analyst Willy Wu said a former researcher in Google’s Innovative Projects division told him that the company’s senior developers were “skeptical about quantum computing, but didn’t know enough about the field to properly assess the risks.”