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Quantum computing stocks have been some of the top performers in the tech world over the past year. Some of these companies have delivered returns of more than 1,000 per cent. This rally has been fueled by excitement around new breakthroughs in quantum technology. Big names like IBM, Microsoft, Google, and NVIDIA have all made progress in the field. But despite this excitement, data from WarrenAI using Investing.com Pro tools suggests that most of these stocks may now be trading far above their real value.
All the major stocks in the sector are considered overvalued based on their current prices and low Proscores. This means that even though share prices are up, their financial strength and future potential may not fully support these high levels. A big shift in the market came when NVIDIA CEO Jensen Huang changed his stance on quantum computing. He had earlier said the tech was still decades away from being useful. But more recently, he called it close to an “inflexion point” where it could start solving real-world problems.
This has helped fuel more gains. Still, analysts warn that while there may be more upside ahead, investors should proceed carefully. The sector is still young and highly speculative.
Among these rising stocks, D-Wave Quantum Inc. stands out with the highest Proscore of 2.05 out of 5. This is still below average, but better than the rest of the group. The stock currently trades nearly 50 per cent above its fair value, and analysts have set a price target that suggests only an 11 per cent upside. Despite that, there is some optimism. Analysts at Rosenblatt like D-Wave’s focus on quantum annealing, a niche form of quantum computing suited for solving complex optimisation problems. D-Wave also recently announced that its latest Advantage2 Quantum Computer is now available. The company says this is its most powerful system yet.
Quantum Computing Inc. comes in second with a Proscore of 1.83. It posted the highest return in the group, gaining over 2,200 per cent in one year. Analysts expect around 26 per cent more upside, but the stock is also far above its fair value. Some experts have expressed caution. Cantor Fitzgerald has a Neutral rating on the stock, saying that while interest is high, full-scale quantum tech is still years away. The company recently landed its first major commercial deal in the U.S., selling its quantum cybersecurity product to a large bank. It also raised $200 million from private investors.
IonQ Inc. ranks third with a Proscore of 1.79. It has the most analyst coverage of any quantum stock. The company’s current price is 28 per cent above its fair value, and analysts forecast about 23 per cent more growth. Some are very bullish on IonQ because of its recent scientific achievements. The company simulated one of the most complex protein folding problems ever done on a quantum computer. This could lead to breakthroughs in drug development. IonQ also ran the first known quantum simulation of a rare physics event, which could help scientists better understand the universe. Rosenblatt recently gave the stock a Buy rating and a $70 target. The company is also working with Emergence Quantum on new ion trap tech.
Rigetti Computing Inc. is last in the group, with a Proscore of 1.76. Like D-Wave, its stock is priced nearly 50 per cent above its estimated fair value. Analysts expect just 11 per cent upside from current levels. B. Riley is still positive on the stock, noting that support from governments, including the U.S., could help its future. Rigetti recently reached a key technical milestone, reporting very high accuracy in two-qubit operations on its modular system.
Overall, the quantum computing sector shows a strange mix of hype and caution. The growth potential is real, and breakthroughs are happening. But every stock in the space still scores below average in fundamental metrics. This suggests that the current high prices may already reflect much of the future potential. For now, investors may need to be selective and avoid getting caught in the excitement without a close look at the numbers.