Early-stage hype is clashing with traditional valuation models—and investors don’t seem to care.
With Nvidia comparisons and better-than-expected earnings, the quantum buzz may not fade just yet.
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Having already enjoyed a strongly bullish April, quantum computing stocks accelerated their gains in May, as more investors bet on this emerging technology becoming the next major market driver—much like AI is today.
Quantum computing has the potential to redefine the boundaries of technological innovation, with experts estimating that this revolution could generate trillions of dollars by 2040.
Unlike classical computers that process bits as either 0 or 1, quantum systems use qubits, which can exist in multiple states simultaneously. This enables them to solve problems that would take today’s most powerful supercomputers thousands of years to crack.
Such computing capabilities offer massive potential to accelerate advancements across countless industries and to create entirely new markets.
Naturally, several major tech companies are active in developing quantum technologies, including Alphabet (NASDAQ:), Microsoft (NASDAQ:), and IBM (NYSE:). However, these tech giants have diverse operations and are far from being pure plays in quantum computing.
As a result, investors seeking more direct exposure are turning their attention to dedicated quantum firms. The most closely watched among them are D-Wave Quantum Inc (NYSE:), IONQ Inc (NYSE:), Rigetti Computing Inc (NASDAQ:), and Quantum Computing Inc (NASDAQ:)—all U.S.-listed.
Quantum Stocks Continue to Soar in May
These stocks have posted strong gains in recent weeks:
D-Wave Quantum surged more than 150% over the past month (as of Wednesday’s close).
Quantum Computing rose 85% over the same period.
IonQ climbed 69% month-on-month.
Rigetti Computing gained 60% month-on-month.
Several recent developments have helped drive these impressive gains, including better-than-expected Q1 earnings results:
D-Wave Quantum reported a loss per share of -$0.02 on May 7, beating the expected -$0.06.
IonQ also reported on May 7, posting a loss per share of -$0.14 versus the expected -$0.28.
Rigetti posted EPS of $0.13 on May 12, well above the forecasted loss of -$0.05.
Quantum Computing reported Q1 EPS of $0.11 on May 15, compared to expectations of a -$0.05 loss.
In addition, remarks from IonQ’s CEO last week—where he compared his company to Nvidia (NASDAQ:)—appear to have energized investor sentiment, triggering sharp moves across all four stocks.
After two months of strong gains, a key question emerges: Can quantum computing stocks maintain their momentum through the summer, a period historically known for market weakness?
To assess this, it’s worth noting that all four stocks currently appear significantly overvalued based on InvestingPro Fair Value, which aggregates multiple respected financial models.
However, given that quantum computing is still in its early stages and the technology is far from mature, the relevance of traditional valuation models—rooted in present and historical data—may be limited.
We therefore looked at analyst forecasts, which remain cautious. Only Rigetti Computing shows upside potential based on the average analyst target—and even then, the expected gain is modest at +5.9%.
Source: InvestingPro
Although quantum computing is definitely a technology to watch, investing in the sector’s specialist stocks at this time, after several weeks of powerful gains, would undoubtedly be bad timing.
Against this backdrop, investors looking for high-potential tech stocks to buy for June and beyond would do well to turn to other options, such as ProPicks AI’s Tech Titans strategy, an AI-powered stock list updated monthly for InvestingPro subscribers.
This smart, sector-focused strategy outperformed in May:
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****Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counseling or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple points of view and is highly risky and therefore, any investment decision and the associated risk remains with the investor.”
