Quantum Computing Stocks: Can They Be the Next Nvidia? A Hard Look at the Numbers
🚀 Wall Street's New Obsession
With Nvidia becoming the most valuable company in the world, everyone is asking the same question: "Where can I find the next Nvidia?" Wall Street thinks they've found the answer—quantum computing stocks.
According to VJ Rakesh, a top-rated analyst at Mizuho, quantum computing has incredible potential:
- 📈 Possible 10,000x performance improvements
- 💰 Total Addressable Market growing from $1B in 2025 to $200B by 2035
- 🎯 That's 200x growth in just 10 years
🔬 Three Quantum Computing Stocks Getting Attention
1. Rigetti Computing (RGTI)
- Superconducting quantum computing leader
- Building their own chips and selling complete systems
- Partners with Amazon, Microsoft, and the Department of Energy
- 18 systems deployed
- 99.5% gate fidelity technology
- Targeting 1,000+ qubits by 2027
2. ION Q
- First pure-play quantum stock on the NYSE
- Focused on networking, cybersecurity, and sensing
3. D-Wave (QBTS)
- The original quantum computing pioneer
- Specializes in quantum annealing, now expanding to gate-based systems
⚠️ Time to Look at the Numbers
Sounds exciting, right? But this is where real investors start asking the important questions.
"Price is what you pay, value is what you get."
This is the single biggest thing new investors miss. They confuse a great story with a great investment.
Rigetti's Actual Numbers
| Metric | Value | What It Means |
|---|---|---|
| Market Cap | $7.4 billion | Massive expectations |
| Annual Revenue | $7.5 million | Smaller than a local apartment business |
| Annual Cash Burn | $70 million | Nearly 10x their revenue |
| Net Income | -$350 million | Deep in the red |
| Price/Sales Ratio | 986x | 45 times higher than Nvidia's 22.85x |
📉 What the Revenue Trend Tells Us
Looking at Rigetti's revenue by year:
- $735K → $8.2M → $13M (growing)
- Then... $12M → $10.8M (declining)
A company that was growing is now seeing revenue decline. Why? Honestly, nobody knows.
💡 The Real Problem: Share Dilution
One of the biggest issues with these companies is stock dilution.
Rigetti has increased their shares outstanding by 185%. Here's what that means:
- Originally 10 shares → Now 28.5 shares
- If you owned 10% → Now you own about 3%
When companies need capital to grow, they issue more shares. This dilutes existing shareholders—your ownership gets watered down like a drink with too much ice.
🤔 Things to Consider as an Investor
Sure, what if this company hits it big and generates $5 billion in revenue with $1.5 billion in profit 10 years from now? At 20x earnings, that's a $30 billion company. Currently at $7.5 billion, you could 4x your money.
But think about it:
- Going from $7.5 million to $5 billion in revenue—is that realistic?
- Out of 100 similar companies, how many would actually make it?
- How much dilution will occur along the way?
🎯 The Key Lesson
The best investors don't try to pick home runs. They eliminate bad investments first.
Remember the EV stocks and meme stocks of 2020? If you bought at the wrong price, you likely lost a lot. Since 1900, thousands of auto companies and airlines have gone under while trying to grow.
The quantum computing story is intriguing and has investor attention. But the valuation is heavily disconnected from fundamentals.
As Warren Buffett says (paraphrased):
"Your job as an investor is to pick a company where you can reasonably understand how much they'll make over the next 5, 10, 20, 30 years and pay a reasonable price today."
Where will these companies be? Honestly, no one knows. If you're a betting person, they're probably more likely to be gone in 5-10 years than to be thriving.
✨ Final Thoughts
Don't chase hype. You've worked hard for your money, and it should work hard for you. Making 7-10% annually and letting compound interest do its magic is a perfectly solid strategy.
What matters in investing is patience, discipline, and a process for understanding what you're buying. Not exciting stories.