Investment Buzz: AI and Quantum Computing Shape the Future

Last year witnessed a surge of interest in artificial intelligence (AI) stocks, with tech giants like Nvidia (NASDAQ: NVDA) and Amazon leading the pack. This excitement propelled key market indicators, such as the S&P 500, the Dow Jones Industrial Average, and the Nasdaq, into double-digit gains. Many believe AI has the capability to transform various industries.

As the AI revolution took off, another technology began to garner attention: quantum computing. While AI focuses on training large language models (LLMs) to learn and solve complex problems, quantum computing utilizes the principles of quantum mechanics to tackle issues beyond the reach of classical computers.

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Recent comments from Nvidia’s CEO, Jensen Huang, have caught the eye of investors. He indicated that practical quantum computers are about 20 years away, leading to a sharp decline in the shares of quantum computing firms. Notably, Rigetti Computing (NASDAQ: RGTI) and Quantum Computing (NASDAQ: QUBT) saw their stock prices drop by 45% and 43%, respectively, in just one trading day.

Despite this setback, both companies have seen astonishing growth, with increases exceeding 1,000% over the past year. Huang’s forecast may have disappointed some, yet there are encouraging developments for current investors in quantum computing.

Image source: Getty Images.

Current Focus of Quantum Companies

To understand the situation, it’s essential to look at what quantum computing companies are doing now. Quantum computing relies on the science of quantum mechanics and uses qubits instead of bits to process vast amounts of data.

This method allows quantum computers to solve problems much faster than classical computers can; for instance, a quantum computer might complete a task in minutes, which could take classical computers thousands of years.

Rigetti, which introduced the first multichip quantum processor for scalable systems, has been marketing its quantum machines since 2023. Recently, it launched the 84-qubit Ankaa-3 system, proving significant advancements in accuracy and hardware design.

Similarly, Quantum Computing focuses on providing enterprise software for quantum systems and is working to incorporate lithium niobate into optical integrated circuits for their products, currently establishing a manufacturing facility for this purpose.

It’s worth noting that both Rigetti and Quantum Computing are not yet profitable. This is common for companies deeply engaged in research and development within the evolving quantum sector.

Huang’s Comments on Quantum Computing Timeline

The comments from Huang that triggered the stock market reaction suggested that “very useful quantum computers” are likely two decades away.

While this seemed disappointing, optimism remains as advancements in quantum computing continue. Upcoming achievements and milestones will probably act as positive catalysts for stock prices in the sector.

In fact, Microsoft recently announced its goal for 2025 to help businesses become “quantum ready” through new initiatives aimed at enhancing quantum skills and providing access to quantum computing resources.

Nvidia’s Upcoming Quantum Day

Moreover, Nvidia is set to host its inaugural Quantum Day on March 20, as part of its GPU Technology Conference (GTC). This event will gather experts to discuss the current state and future potential of quantum computing. Updates presented there may help narrow the timeline towards achieving practical applications.

Despite the lengthy journey ahead for quantum companies to start generating significant profits, their stock valuations could rise in response to positive news and technological breakthroughs, providing hope for long-term investors.

A New Opportunity for Investors

If you’re feeling like you’ve missed the opportunity with some successful stocks, there may be good news for you.

Occasionally, analysts issue a “Double Down” stock recommendation for companies they believe are about to grow. If you’re hesitant that the best time to invest has passed, now might be the ideal moment to act. The data highlights impressive returns:

• Nvidia: An investment of $1,000 back in 2009 would have grown to $357,084!*
• Apple: A $1,000 investment made in 2008 would be worth $43,554!*
• Netflix: Investing $1,000 in 2004 would have turned into $462,766!*

Currently, alerts for “Double Down” investments are being issued for three promising companies, and opportunities like this may not present themselves again soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of January 13, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino holds positions in Amazon. The Motley Fool has investments in and recommends Amazon, Microsoft, and Nvidia. The Motley Fool suggests the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool follows a strict disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.