
Prediction: Quantum Computing Stock Will Be Worth This Much in 2030
Quantum Computing has emerged alongside other popular quantum stocks such as IonQ, Rigetti Computing, and D-Wave Quantum over the last year.
While the company's approach to building quantum applications is interesting, past ambitions in other markets and an inconsistent financial profile should make investors pause before blindly buying the hype narrative.
Although Quantum Computing has interesting potential, the amount of unknowns surrounding the company's future are hard to ignore.
10 stocks we like better than Quantum Computing ›
One of the more curious companies that has piqued investor intrigue in the quantum computing market is a business called (wait for it!) Quantum Computing (NASDAQ: QUBT). With a name like that, I wonder how it landed on so many radars.
Sarcasm aside, Quantum Computing (the business) deserves a look -- and not just because of its 2,400% share price gains over the last year. To me, the company's technological promises and its actual business just don't align.
Let's explore how Quantum Computing is attempting to disrupt the artificial intelligence (AI) realm and then dig into whether or not the company has what it takes to fulfill its lofty ambitions.
Is Quantum Computing the next multibagger AI stock? Read on to find out.
Quantum Computing might look like an exciting company on the surface, but...
Quantum-based applications have the potential to transform the computing industry thanks to their fundamentally differentiated architectures. In simple terms, classical computing is based on binary code, written through a series of bits expressed as 1 or 0.
Quantum computing uses qubits, which means they can exist as both 1 and 0 at the same time -- a process known as superposition. This allows for more complex information processing compared to today's classical computers. There are multiple ways that companies are developing qubits.
IonQ relies on a process called trapped-ion, which essentially uses lasers to trap atoms and use them as the foundation of a qubit. Meanwhile, other competitors such as Rigetti Computing and D-Wave Quantum use superconducting circuits and quantum annealing techniques to make qubits.
Quantum Computing, on the other hand, is using light (photons) as opposed to Rigetti and D-Wave's electricity-based foundation or IonQ's trapped atom technology. In theory, photonic qubits may be more energy efficient and easier to scale than other approaches that are heavily reliant on sophisticated cooling systems.
... there are quite a few red flags to point out
Before buying into the idea that Quantum Computing is on the verge of a technological breakthrough, consider the following:
Quantum Computing was once known as Innovative Beverage Group Holdings (IBGH). Why did the company pivot from beverages to qubits? Well, consider that IBGH went out of business, and the leftover management team decided to acquire a small company called QPhoton and completely shift its focus to quantum computing.
Over the last year, Quantum Computing has generated $385,000 in sales. While the idea of photonic qubits is interesting, Quantum Computing is far from building a competitive moat over its rivals.
The company's nominal revenue base and unproven roadmap hint at possible liquidity crunches down the road. For now, Quantum Computing appears to be relying on issuing stock as a means to raise cash and fund the operation.
Despite these red flags, Quantum Computing has seen its market value climb from $55 million to $2.4 billion in just one year.
QUBT Market Cap data by YCharts
The company's valuation is far higher than what investors witnessed during prior stock market bubbles during the internet boom and the COVID-19 stock market euphoria.
Where will Quantum Computing stock be in five years?
Given the ideas explored above, it's clear that Quantum Computing has virtually nothing to show for its supposed innovative photonic processes. The lack of strategic partners and product-market fit has me thinking that Quantum Computing offers more along the lines of vaporware than anything groundbreaking at this time.
With ongoing research and development (R&D) and capital expenditures (capex) required to explore quantum technology, Quantum Computing is likely going to continue tapping the capital markets for liquidity unless some transformative deals begin to take shape -- which I suspect is highly unlikely.
In my eyes, Quantum Computing stock is benefiting for one reason above all else. The company's name isn't just associated with one of AI's hottest new themes -- it's literally the name of the actual trend. To me, this is a case study revolving around the idea of investors blindly chasing narratives over sound fundamentals.
I think that Quantum Computing is headed toward insolvency and could wind up bankrupt by 2030 (if not sooner). Alternatively, regulators could begin to scrutinize the company more heavily, and Quantum Computing could end up as a delisted stock.
Regardless of how things shake out, I think Quantum Computing's equity value will diminish significantly in the coming years. For this reason, I think the company will have little-to-no value by the end of the decade.
Should you invest $1,000 in Quantum Computing right now?
Before you buy stock in Quantum Computing, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Quantum Computing wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!*
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