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A Quantum Computing Crash
Nvidia CEO crushes quantum stocks, Constellation Energy buys its competition, and more from the day.
Tom Bruni
January 08, 2025
NEWS
A Quantum Computing Crash
Source: Tenor.com
Quantum computing stocks plunged across the board after Nvidia’s CEO said practical use of the technology is still decades away. Meanwhile, the December Fed minutes flagged uncertainty caused by President-elect Trump’s policies, hinting at slower rate cuts and a more mixed message from the central bank. 👀
Today's issue covers Jensen Huang’s comments crushing quantum stocks, Constellation Energy buying a competitor, and more from the day. 📰
Here’s the S&P 500 heatmap. 8 of 11 sectors closed green, with materials (+0.55%) leading and communication services (-0.59%) lagging.
Source: Finviz.com
And here are the closing prices:
S&P 500 | 5,918 | +0.16% |
Nasdaq | 19,479 | -0.06% |
Russell 2000 | 2,239 | -0.48% |
Dow Jones | 42,635 | +0.25% |
Most bullish/bearish symbols on Stocktwits at the close: 📈 $JSPR, $XHG, $PENG, $SCCO, $KMDA 📉 $AVDL, $VIR, $DRIO, $ALLY, $HELE*
*If you’re a business and want to access this data via our API, email us.
STOCKS
Jensen Huang Casts Doubts On Quantum Computing 😬
Quantum computing stocks have been all the rage lately, seen as the next leg of the artificial intelligence (AI) and broader technology rally. However, the recent rally has been stopped in its tracks following comments from Nvidia CEO Jensen Huang during the company’s Analyst Day. 🛑
Evercore ISI analyst Mark Lipacis asked about Nvidia’s strategy for quantum computing and how quantum computing differs from the accelerated computing platforms Nividia has. According to the event transcript, Huang replied:
“Quantum computing is useful for small data, big compute, and big combinational compute problems but isn’t suitable for large data problems.
He said a classical computer, along with the quantum computer, is needed for error correction. Since the classical computer has to be the fastest, Nvidia is perfect for the classical part of classical-quantum, he added.
If you kind of said 15 years for very useful quantum computers, that would probably be on the early side. If you said, you know, 30, it’s probably on the late side. But if you picked 20, I think a whole bunch of us would believe it.”
His comments echo the findings of Boston Consulting Group, the management consultancy firm that suggested the quantum computing industry will grow through three phases, achieving full-scale fault tolerance likely after 2040. ⏳️
Quantum Computing stocks like D-Wave Quantum, Quantum Computing, Inc., IonQ, Rigetti Computing, Arquit Quantum, and others all declined significantly today, with many posting losses in the 30-50% range.
Following the selloff, a new poll on Stocktwits shows mixed sentiment among retail investors and traders toward the industry. Roughly 44% of the 8,100 respondents remain bullish long-term, with a third agreeing that it’s too early, and the remaining trading the swings or avoiding the stocks entirely. 😬
Source: Stocktwits.com
On top of the tech stock pessimism, the December Fed Minutes raised further concerns about the path of interest rates. The Wall Street Journal’s Nick Timiraos flagged the following quote in his recap story:
"Recent higher-than-expected readings on inflation, and the effects of potential changes in trade and immigration policy, suggested that the process [of bringing inflation to target] could take longer than previously estimated."
Time will tell what the fate of quantum computing stocks is. But in a high interest rate environment, the growth trajectory and price investors are willing to pay for these types of long-term, speculative bets both face meaningful headwinds.
PRESENTED BY STOCKTWITS
Mastering Risk Management With @alphatrends 🛡️
Pro trader and Stocktwits user Brian Shannon is back for another power hour, focusing on managing risk in this choppy market environment. He analyzes several key indices and high-beta stocks using the anchored VWAP and outlines levels of interest, how he manages trades, common pitfalls in “buying the dip,” and more!
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