Historical precedent hasn’t been kind to next-big-thing technologies — and quantum computing doesn’t look to be an exception.
Roughly 30 years ago, the mainstream proliferation of the internet began altering the growth trajectory for businesses around the globe. This technology opened new sales and marketing channels for companies, as well as broke down the information barrier that had existed for more than a century on Wall Street between professional and retail investors.
For decades, investors have been waiting for the next hyped technology that would lead corporate America forward. The rise of artificial intelligence (AI) has, thus far, been the answer. Nvidia has seen its valuation skyrocket as its superior graphics processing units power enterprise AI-accelerated data centers. Over the trailing decade (as of Dec. 11, 2025), shares of Nvidia have risen by more than 21,800%!
Gains of this magnitude are a rarity on Wall Street. Investors are always on the lookout for businesses that share similar characteristics to industry-leading companies, with the hope of buying the next Nvidia.
In 2025, quantum computing stocks have flashed their potential. At one point this year, pure-play stocks IonQ (IONQ 4.26%), Rigetti Computing (RGTI 3.87%), D-Wave Quantum (QBTS 6.72%), and Quantum Computing Inc. (QUBT 6.08%) had rallied as much as 5,400% on a trailing 12-month basis. Investors have been enamored by the prospects of quantum computing and its potential to solve complex problems and accelerate the learning process of AI algorithms.
But are quantum computing stocks, such as IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc., really capable of becoming the next Nvidia? History offers some very big (and likely disappointing) clues.
Over the last three decades, some of Wall Street’s game-changing technologies and hyped trends have gone on to transform the world. The internet is a perfect example.
But the one trait every next-big-thing trend has shared is an early innings bubble-bursting event.
These bubbles don’t form by accident. They’re a direct result of investors overestimating the early stage adoption rate, utility, and/or optimization of a hyped innovation. Eventually, these expectations aren’t met, which leads to the music stopping. Though it’s impossible to pinpoint when bubbles will burst, historical precedent (e.g., the internet, genome decoding, nanotechnology, blockchain technology, and the metaverse) is quite clear that this is the norm with game-changing technologies.
Although we’ve observed some early commercialization of quantum computers, with Amazon and Microsoft both allowing their quantum-cloud service subscribers access to IonQ’s and Rigetti’s quantum computers, the industry is still many years away from broad-based commercialization. It’ll be even longer before quantum computers can offer advantages over classical computers for practical problem-solving.
History also shows that early stage companies often raise capital in ways that are less-than-favorable to existing shareholders.
For example, in October, IonQ sold 16.5 million shares at $93 per share to raise $2 billion. The company’s equity offering also came with an assortment of warrants that can be exercised at specific price points in the future.
Diluting existing shareholders to raise capital is common practice for unproven businesses that have limited access to basic financial services, such as traditional loans and/or lines of credit. While I’m not solely calling out IonQ, it fits the mold of what early stage businesses typically do to fund their research and development, as well as ramp up their sales.
Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. are likely to follow in IonQ’s footsteps in the years to come, which can weigh on the share price of these pure-play stocks.
Historical precedent comes into play when examining the valuations of quantum computing stocks, as well.
Although value is in the eye of the beholder on Wall Street (what one investor finds expensive might be viewed as a bargain by another), the trailing 12-month price-to-sales (P/S) ratio can cut through this subjectivity and provide an objective outlook for companies on the leading edge of next-big-thing trends.
Before the dot-com bubble popped in March 2000, many of the companies heralding the rise of the internet peaked at P/S ratios in the range of 30 to 40, with some wiggle room in each direction. While this is a somewhat arbitrary line in the sand, P/S ratios above 30 haven’t proved sustainable over an extended period for any industry-leading company since the mid-1990s.
As of the closing bell on Dec. 11, trailing 12-month P/S ratios for IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. clocked in at 163, 1,029, 337, and 3,346, respectively. Even if investors used P/S ratios based on projected sales in 2028 for these four pure-play stocks, they’d all be well above this historical threshold used to identify stock market bubbles.
Last but certainly not least, history has shown that early market leaders of next-big-thing trends aren’t always long-term winners.
There’s little question that IonQ, Rigetti, D-Wave, and Quantum Computing Inc. are enjoying their first-mover advantage. It’s the reason Wall Street has rewarded these pure-play stocks with aggressive valuations, as evidenced by their P/S ratios. But the barrier to entry for quantum computing may be far less than you realize.
In December 2024, Alphabet debuted its Willow quantum processing unit (QPU), which successfully supported a quantum algorithm on its hardware in a recent test. Meanwhile, Microsoft introduced its Majorana 1 QPU in February.
Share-based dilution and ongoing operating losses aside, there’s no bigger risk for IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. than cash-rich members of the “Magnificent Seven” deciding they want to dominate a technology that the analysts at Boston Consulting Group believe can create up to $850 billion in global economic value by 2040.
Unlike quantum computing pure-play stocks, members of the Magnificent Seven have highly profitable foundations. They can handily outspend quantum computing stocks and quickly erode their first-mover advantage.
Suffice it to say, I don’t anticipate IonQ, Rigetti Computing, D-Wave Quantum, or Quantum Computing Inc. becoming the next Nvidia.
