Microsoft’s Quantum Leap Sparks a Rally: What to Expect from Quantum Computing Stocks

Quantum Computing one-month returns

Here we go again….. Quantum Computing is a Real Thing according to Microsoft’s comments this morning.

Shares of D-Wave Quantum Inc (QBTS), Rigetti Computing (RGTI) and IonQ Corporation (IONQ) are all jumping back to life after a week of fear-based selling dropped all three companies by roughly 70% over the last week.

Speculators are back on the hunt for early investments in quantum computing stocks after Microsoft’s President and Chief Operating Officer of Strategic Missions and Technologies, Mitra Azizirad, is now writing that 2025 is the year to become “quantum ready”.

Azizirad’s post to Microsoft’s blog – which can be found here – states that “We are at the advent of the reliable quantum computing era,” including that “As we look toward the next 12 months, the pace of quantum research and development is only going to accelerate, making this a critical and catalyzing time for business leaders to act.”

The post feels a little unreal for investors that have been through the last two weeks of volatility, but get used to it, this is what investing in true innovation is like.

Quantum Computing one-month returns

Quantum Computing is Not New

The history of quantum computing is a journey of groundbreaking ideas and innovation.

The idea of quantum computing started in the 1980s when scientists suggested that classical computers couldn’t efficiently solve certain complex problems.  These scientist had a vision that computers based on quantum mechanics could.

Quantum mechanics is the science of how tiny particles like atoms and electrons behave in strange ways that don’t follow the usual rules of physics.

Quantum computing is hard because qubits - the large building blocks - are super sensitive to their surroundings and easily lose their state (called decoherence). Errors happen often.  Fixing them is much harder than in regular computers. Designing and maintaining the complex systems needed for quantum processes is extremely challenging.

In the 1990s, mathematician Peter Shor developed an algorithm that showed quantum computers could solve problems, like breaking encryption, much faster than regular computers. This proved the potential of quantum computing to tackle challenges that seemed impossible.

Fast forward to today, companies like Google, IBM, and Rigetti are building real quantum computers. Though still in development, these machines are starting to show how they could revolutionize fields like medicine, AI, and cybersecurity in the near future.

What to Expect When Investing in Quantum Computing

Volatility.

That’s right, get used to it because it’s here to stay, and it’s perfectly normal.

For example, NVIDIA was highly speculative in 2019 and 2020 as investors started chasing the potential innovation behind AI.

In 2020, NVIDIA saw its stock move 2% or more 120 trading days out of 252 for the year.  The largest one-day gain, +18%.  The largest one-day loss was -17%.  The numbers continued like that through 2023 as the AI boom continued.

Things settled down in 2024 as the frequency and size of NVIDIA’s daily swings declined, but the company is still volatile as investors speculate on the company’s Blackwell product.

For comparison, Rigetti stock saw 156 days in 2024 where the stock traded higher or lower by 2%.  It’s just the beginning as this stock is now on the market’s radar.

Keeping that in mind, let’s take a look at the current charts for all three of these quantum computing stocks to determine what to expect.

IonQ Corp. (IONQ)

First, from a long-term perspective, IONQ shares are trading in a long-term bull market trend.  The stock crossed above its 20-month moving average in November.  The 20-month is a long-term trendline that serves as the line between a bull and bear market trend for a stock.

The view of IONQ’s daily chart suggests that the stock experiences a deep correction over the last week but that shares are still trading in a healthy trend.

IONQ found support at $30 last Wednesday on its heaviest daily volume in years.

That round-number ($30) has now been tested multiple times and held the stock from further declines.

Today, shares are crossing above their 50-day moving average.  That trendline is in a bullish trend higher suggesting that the stock will continue its advance.

Investors should consider that a break below $30 is still possible which would target a move to $15 where IONQ’s 200-day moving average sits for support for a “buy the dip” opportunity.

IONQ Stock Analysis

D-Wave Quantum

Like IonQ Corporation, D-Wave Quantum stock is trading according to its technicals.

The stock made a hard landing at the $4 price on Monday and has continued to hold above the price.  Similarly, QBTS shares are back above their bullish 50-day moving average as buying volume is returning to the stock.

D-Wave Quantum shares are having difficulty moving above $6, which is the price that investors and traders should watch closely.

A move above that price will fortify the stock’s recent trading bottom and target a return to $10.

A shift back below $5 will shake investor’s faith in the near-term outlook resulting in the stock reversing below $4.

Remember, long-term investors will expect these types of drops as trader’s take advantage of a stock’s volatility patterns.

QBTS Stock Analysis

Rigetti Computing

Rigetti Computing stock is attempting to close above its psychologically important $10 price point.

Shares found support from their 50-day moving average and the $7.50 price on Monday as investors traded an all-time high level of volume.  That spike in buying volume helped to build confidence in the short-term direction for the stock.

A close above $10 followed by a return to $12 would serve as a catalyst to attract buyers as the stock makes its recovery towards $20.

Over the next few weeks, Rigetti may test its 50-day again as market volatility remains high.

Rigetti Computing Analysis

Recommended