Quantum computing stocks have been in the spotlight lately, but Jensen Huang offered optimistic investors a reality check.
Recently, Nvidia (NVDA -1.96%) CEO Jensen Huang made some high-profile, market-moving comments regarding his thoughts on quantum computing. Stocks in this sector also sold off as a result. Still, I predict that in 2025, quantum computing will emerge as one of the next big waves for investors interested in artificial intelligence (AI).
What did Huang just say about quantum computing?
Huang shared his thoughts on quantum computing applications during a panel discussion at this year’s CES conference in Las Vegas. Nvidia executives appear bullish about the capabilities of quantum computing, but asserted that it could take 20 years for the technology to become “very useful.”
Image source: Getty Images.
Why his comments matter
The chart below shows the price movements of some high-profile quantum computing stocks. Over the past three months, Rigetti Computing, Quantum Computing, D-Wave Quantum, and IonQ have each seen considerable momentum.
RGTI data by YCharts.
However, all four stocks started seeing significant declines from around the same time earlier this month. Personally, I don’t think the timing of Mr. Hwang’s public comments and the sharp rise in quantum computing stocks is a coincidence.
The dynamics shown above highlight several important ideas. First, just because a quantum computing stock has risen over the past few months doesn’t necessarily mean it’s a wise investment. The reality is that the companies in the chart above are all very early-stage companies that are generating little revenue and will remain cash-burning businesses for some time.
This leads to my second point. Wall Street influencers and corporate executives sometimes move markets with their rhetoric. While Huang’s comments on quantum computing were by no means negative, his views have made many investors aware of the hard truth that quantum computing represents a long-term opportunity. Ta.
So those who bought quantum computing stocks in November and December are likely left with the unfortunate bag.
Should you invest in quantum computing?
Given Huang’s admission that this technology could ultimately help solve increasingly important and sophisticated problems, he asked, “Is quantum computing worth allocating to your AI portfolio? The most important question remains: ? In my opinion, there are several ways to invest in it. The first and most direct way is to buy certain quantum computing stocks.
However, a more independent approach would be to invest in quantum computing-themed exchange traded funds (ETFs), such as the Defiance Quantum ETF. Because ETFs are made up of a series of individual stocks, they provide some volatility mitigation. That said, thematic investing can be a riskier option than buying broader market funds, as you can still gain exposure to a specific focus area.
In my view, the best and smartest way to invest in quantum computing is through the stocks of diversified mega-cap technology companies where quantum computing is just one area of interest. Companies like IBM, Alphabet, and Microsoft are all considering quantum computing as part of their AI roadmaps, but they’re not betting their entire future on the technology. Additionally, neighboring companies that will be essential to the development of quantum chips, such as Nvidia and Advanced Micro Devices, may also be good candidates.
Ultimately, I agree with Huang that quantum computing has meaningful potential. However, given how far this technology is from commercialization, it is nearly impossible at this stage to determine which companies will be at the forefront of this trend.
Alphabet executive Suzanne Frye is a member of The Motley Fool’s board of directors. Adam Spatacco has held positions at Alphabet, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, International Business Machines, Microsoft, and Nvidia. The Motley Fool recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
