Quantum Stocks Surge After Microsoft’s Optimistic Outlook

Shares in quantum computing are rebounding today, driven by encouraging remarks from Microsoft (NASDAQ: MSFT). Mitra Azizirad, a top executive, stated that the industry is on the verge of significant breakthroughs.

Excitement in Quantum Investing

This Wednesday, investors are reacting positively to Azizirad’s prediction that quantum computers will soon address substantial challenges and unlock new business opportunities. Shortly after her comments, shares of Rigetti Computing (NASDAQ: RGTI) surged by 25.6% as of 10:25 a.m. ET. Additionally, IonQ (NYSE: IONQ) rose 26.9%, D-Wave Quantum (NYSE: QBTS) increased by 31.1%, and Quantum Computing (NASDAQ: QUBT) skyrocketed 44% during the first hour of trading on Nasdaq.

A Rapid Shift in Quantum Sentiment

The turnaround in quantum stock fortunes is remarkable, especially considering the previous week’s plunge spurred by critical comments from Nvidia (NASDAQ: NVDA) CEO Jensen Huang. He estimated it might take up to two decades before quantum computers are meaningfully viable. This, combined with negativity from Meta Platforms (NASDAQ: META) CEO Mark Zuckerberg, led to declines of over 50% for many stocks in less than a week.

Yet, Azizirad’s assurance that 2025 will be pivotal for quantum readiness revitalized investor interest. She emphasized that quantum research and development will accelerate significantly over the next year, hinting at growing positive narratives surrounding quantum technology.

This shift in outlook could bode well for quantum stock prices, irrespective of their current financial performance.

Image source: Getty Images.

Rising Risks Amid Market Optimism

However, rising stock prices can lead to inflated valuations, making these investments riskier. Currently, the four highlighted quantum companies collectively have a market capitalization of approximately $12.6 billion. Yet none are profitable. Together, they generated less than $60 million in revenue over the past year.

This situation results in quantum stocks trading at an eye-popping rate of 210 times their combined revenues.

For instance, Quantum Computing has made headlines primarily for its name, yet its $386,000 revenue translates to a staggering valuation of almost 2,500 times sales. Meanwhile, IonQ, valued at $6.4 billion with $37.5 million in revenue, appears more reasonable, with a valuation of 170 times sales. However, even 170 times sales is considered excessive in practical terms.

Best Investment Strategy for Quantum

If you are set on investing in the quantum sector, a less volatile option may be to consider Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). This company owns the Willow quantum chip, is profitable, and trades at a reasonable 7 times sales, making it a safer choice in the quantum domain.

Weighing the Decision to Invest in IonQ

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Rich Smith has positions in Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

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