Quantum computing stocks crashed Wednesday after Nvidia CEO Jensen Huang took some air out of the hype surrounding the industry.
Speaking at the company’s analyst day, Huang suggested that the commercialization of quantum computers was still many years away.
“If you kind of said 15 years for very useful quantum computers, that would probably be on the early side. If you said 30, it’s probably on the late side. If you picked 20, I think a whole bunch of us would believe it,” he said.
His prediction sapped enthusiasm for a group of stocks that had rocketed higher in 2024.
Stocks of companies including IONQ Inc., Rigetti Computing Inc., and D-Wave Quantum Inc. were down around 40% midday Wednesday after dropping nearly 50% at their lows.
The Defiance Quantum ETF (QTUM), which holds those stocks as its top three holdings, was last trading 5% lower.
The fund has 75 holdings spanning speculative stocks like the aforementioned trio to giants like Taiwan Semiconductor Manufacturing Co.
Quantum computers use the principles of quantum mechanics to perform computations far beyond the capabilities of classical computers.
Stocks of quantum computing companies and the QTUM exchange-traded fund were turbocharged late last year after Google parent Alphabet Inc. announced that it had made a significant quantum computing breakthrough.
The company’s quantum chip Willow “performed a standard benchmark computation in under five minutes that would take one of today’s fastest supercomputers 10 septillion years—a number that vastly exceeds the age of the Universe,” Hartmut Neven, founder and lead for Google Quantum AI, said in December.
Shares of IONQ, which were trading at $7 per share in September, rose as high as $51 early this year, and were last trading at $29. Rigetti Computing, meanwhile, climbed to $20 from $0.80 in that same period, but has since been cut in half to $10.
The diversified QTUM exchange-traded fund also performed well, rising from $57 in early September to more than $86 at its high in December, a gain of 50%.
It’s since pulled back 7% from those levels, a much more modest decline than individual quantum computing stocks thanks to its exposure to more established companies like TSMC, Teradyne, ASML Holdings, and others.
