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Amidst a broader market selloff today due to tariff uncertainties and overall bearish sentiment, quantum computing stocks are being hit hard. Shares of major quantum computing companies fell by as much as 6% as investors went risk off and piled into safe-haven stocks better suited to ride a recession. While shares of Unilever, Proctor & Gamble and Johnson & Johnson were in the green, those of Quantum Computing Inc and Rigetti Computing lost 6% or close to 6% to lead major indexes in losses.
Markets Shun Quantum Computing Stocks, Pile Into Safe Haven Equities As Dreary September Trading Kicks Off
Among the four major quantum computing stocks, which are of firms that either make quantum computing hardware or provide it to others, shares of Quantum Computing Inc. (NASDAQ:QUBT) and Rigetti Computing, Inc. (NASDAQ:RGTI) were hit the hardest.
The former was down by 5.6% as of late afternoon, while the latter had shed 5%. However, both of them had lost close to 6% earlier during trading today amidst a broader risk-off sentiment, which mirrored a rise in Treasury yields, scaring investors away from risky sectors.
The other two major quantum computing stocks, namely IonQ Inc (NYSE:IONQ) and D-Wave Quantum Inc. (NYSE:QBTS) were relatively muted but still in the red. Shares of IONQ were down by 35 basis points while D-Wave had recovered its losses during the day and was down by 15 basis points by late afternoon.
Earlier during the day, both had opened sharply lower and continued their descent amidst an uncertain Wall Street where investors battled to position themselves ahead of key data releases due later this month.
The bifurcation in quantum computing stock performance appears to stem from their products. While IonQ and D-Wave Quantum provide quantum computing software resources as well, which are margin friendly and can sustain demand even if a recessionary environment creates tight budgets, Rigetti and Quantum Computing are primarily hardware companies.
This apparent trend appeared to be evident later during the day, and the quantum computing firms with software exposure ended in the green half an hour before trading was set to close. Therefore, investors, it appears, are willing to bet on quantum computing software as of now. Quantum computing stocks have faced significant volatility over the past year.
They soared in December after Google's Willow quantum computing chip claimed to have significantly reduced the calculation times for complex problems over supercomputers. However, the stocks sank in January after NVIDIA CEO Jensen Huang predicted that quantum computing might not deliver short-term results.
Year-to-date, the Defiance’s QTUM – Quantum Computing ETF, which includes several of the stocks covered, is up by 13.9% but has lost 1.4% during the day's trading.
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