University of Kwazulu-Natal

Nvidia Ceo S Doubts On Quantum Computing Lead To Major Stock Declines

Bonisiwe Shabane
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nvidia ceo s doubts on quantum computing lead to major stock declines

The quantum computing sector experienced a significant setback on Wednesday as Nvidia (NVDA) CEO Jensen Huang‘s remarks cast a long shadow over the timeline for the practical application of quantum computers. Huang’s cautious outlook during Nvidia’s analyst day, where he suggested that “very useful” quantum computers might be 15 to 30 years away from realization, led to a sharp decline in stock prices for leading... Quantum Computing Inc. (QUBT), IonQ Inc. (IONQ), Rigetti Computing (RGTI), and D-Wave Quantum (QBTS) saw their shares plummet in premarket trading, with drops exceeding 24% for Quantum Computing, D-Wave, and Rigetti, and a 16% decrease for IonQ. This downturn was particularly stark given the recent surge in these stocks, fueled by optimism about quantum computing’s potential and amplified by Alphabet’s (GOOGL, GOOG) recent advancements in the field.

Over the past year, quantum computing stocks have seen dramatic gains, with Quantum Computing Inc. soaring by more than 1,940%, Rigetti climbing over 1,450%, D-Wave surging by more than 1,025%, and IonQ rising nearly 300%. Huang’s prediction not only affected U.S.-based companies but also had a ripple effect in Asia, notably impacting Chinese quantum computing firms like QuantumCTek Co. Ltd and Accelink Technologies Co. Ltd, whose shares also fell significantly. His statement provided a stark contrast to the bullish sentiment that had driven these stocks to new heights, suggesting that the technology’s journey to becoming a mainstream, practical tool might be much longer than...

This reaction in the stock market underscores the volatility and speculation inherent in investing in cutting-edge technologies like quantum computing. While the theoretical benefits of quantum computing, including solving complex problems in cryptography, drug discovery, and optimization, are well-documented, the practical implementation faces numerous challenges. These include not only the technical hurdles of maintaining quantum coherence and reducing error rates but also the significant investment in research and development required to make these systems viable for everyday use. Moreover, Huang’s comments reflect a broader industry acknowledgment that quantum computing, despite its promise, remains in the realm of advanced research rather than immediate commercial application. This perspective tempers expectations and might encourage a more realistic approach to investment and development in the sector, focusing on long-term growth and partnerships with classical computing technologies to bridge current gaps. Shares of quantum computing firms took a significant hit in aftermarket trading on Tuesday, following remarks from NVIDIA CEO Jensen Huang that cast doubt on the near-term viability of the technology.

Companies like IONQ, D-Wave Quantum, QuantumSi, Quantum Computing Inc., and Rigetti Computing saw stock declines ranging from 3% to 15%. This downturn came on the heels of a broader sell-off in the tech sector, which has been under pressure in recent weeks. During an investor meeting, Huang made it clear that he views quantum computing as still being in its infancy, suggesting that it could take at least 20 years before the technology becomes genuinely useful. His comments, made in response to a question from Evercore analyst Mark Lipacis, were striking. Huang noted that if one were to estimate a timeline for practical quantum computers, 15 years might be overly optimistic, while 30 years could be too conservative. “But if you picked 20, I think a whole bunch of us would believe it,” he stated, underscoring the uncertainty surrounding the timeline for quantum advancements.

The skepticism from Huang is not without merit. Quantum computing, which leverages the principles of quantum mechanics to tackle complex computational problems, faces numerous physical challenges. The intricacies of manipulating quantum phenomena are daunting, and Huang emphasized that quantum technology cannot address every problem. He pointed out that classical computing remains essential for error correction, a process that is vital for quantum systems to function effectively. This interdependence highlights a significant hurdle: quantum computing cannot yet operate independently of classical systems, limiting its immediate applicability. Despite Huang’s cautious outlook, advocates of quantum computing continue to champion its potential as a transformative force in the tech landscape.

Recent announcements, such as Google’s claim of overcoming a pivotal challenge with a new quantum chip, have sparked excitement. However, even with such advancements, experts agree that practical implementation is still years away. The gap between theoretical breakthroughs and real-world applications remains a chasm that the industry must navigate. The reaction of the market reflects a broader sentiment of uncertainty surrounding the future of quantum computing. Investors, already jittery from a tech sector slump, appear to be recalibrating their expectations based on Huang’s comments. The reality is that while quantum computing holds promise, the path to practical utility is fraught with challenges that are not easily surmountable.

Quantum computing stocks are plunging again after another major tech leader cast doubts on the technology’s usefulness in the near future. During an appearance on the Joe Rogan podcast, Meta chief executive Mark Zuckerberg echoed Nvidia chief executive Jensen Huang’s prediction that quantum computing’s potential is a “decade plus out.” “I’m not really an expert on quantum computing — my understanding is that’s still quite a ways off from being a very useful paradigm,” Zuckerberg said in the podcast episode released Friday. D-Wave Quantum (QBTS) and Rigetti Computing (RGTI) saw shares fall by more than 25% during mid-day trading on Monday, with D-Wave down by around 30% and Rigetti down by more than 27%. Quantum Computing, meanwhile, saw its shares fall by around 23%, and IonQ (IONQ) shares were down by more than 12%. The quantum computing stocks also tanked the previous week after Nvidia’s Huang said useful quantum computers are decades away during the chipmaker’s financial analyst day at the Consumer Electronics Show (CES).

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