Nvidia dampens the euphoria: Quantum computing stocks plunge

Shares in the quantum computing sector experienced a notable decline on Wednesday after Nvidia CEO Jensen Huang tempered expectations for the industry at an analyst conference. Huang expressed the view that the commercial use of quantum computers is many years away. In his opinion, the breakthrough might occur in 15 to 30 years. This forecast dampened the euphoria that had previously driven the stock prices of numerous companies upward. Shares of companies like IonQ, Rigetti Computing, and D-Wave Quantum posted midweek losses of about 40% after having temporarily fallen nearly 50%. The Defiance Quantum ETF (QTUM), which has these companies as its three largest holdings, recently lost 5% in value. Alongside the mentioned quantum companies, the 75 securities in this ETF's portfolio include established players like Taiwan Semiconductor Manufacturing, which cushioned the fund's decline compared to the sharper correction of individual quantum computing stocks. Fascination for quantum computers, which enable calculations that classical computers cannot handle, was sparked at the end of last year. At that time, Google's parent company Alphabet reported a significant breakthrough. A quantum chip called Willow performed a calculation in less than five minutes, which would take one of today's fastest supercomputers 10 septillion years. IonQ shares rose from $7 in September to as much as $51 in early 2024 and were last trading at $29. Rigetti Computing experienced an increase from $0.80 to $20 in the same period but fell back to $10. The QTUM ETF climbed from $57 in September to over $86 in December, a 50% gain, but has since relinquished 7% from that peak.