University of Kwazulu-Natal

Why Nvidia S Quantum Outlook Crushed Ionq And Rigetti Computing Msn

Bonisiwe Shabane
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why nvidia s quantum outlook crushed ionq and rigetti computing msn

Nvidia CEO Jensen Huang recently predicted it could take 15 to 30 years to bring “very useful quantum computers” to the market. He said those systems would require a million more quantum bits (qubits) than they have today. Huang’s cautious comments caused two of the market’s most popular quantum computing stocks, IonQ (NYSE: IONQ) and Rigetti Computing (NASDAQ: RGTI), to plunge 39% and 45%, respectively, on Jan. 8. Let’s see why that happened — and if IonQ and Rigetti are still worth buying after their precipitous declines. Start Your Mornings Smarter!

Wake up with Breakfast news in your inbox every market day. Sign Up For Free » Traditional computers store their data in binary bits of zeros and ones. Quantum processing units (QPUs) can store zeros and ones simultaneously in qubits, which enables them to process data much faster than traditional computers. But quantum computers are much larger and pricier than their binary counterparts, and they tend to produce more errors with their rapid fire calculations. That’s why they’re still mainly used by universities, research institutions, and government agencies for niche calculations instead of more practical applications for mainstream businesses.

Quantum computing stocks experienced a significant market correction after Nvidia’s CEO, Jensen Huang, tempered expectations by suggesting that practical, “very useful” quantum computers might be 15 to 30 years away from realization. This statement led to a collective $8 billion market value loss for companies like Rigetti (RGTI), D-Wave Quantum (QBTS), Quantum Computing (QUBT), and IonQ (IONQ). This development stymied what had been a speculative bubble, fueled by last year’s excitement around Google’s quantum computing breakthrough. The search giant’s Willow chip demonstrated remarkable capabilities, solving in five minutes a problem that would take one of the world’s fastest supercomputers an astonishing septillion years. Despite the potential in areas like national security and government contracts, the immediate revenue generation of these firms remains negligible, casting doubts on their investment value due to potential dilution risks. At the same time, the U.S.

government is ramping up efforts, as per a Bloomberg report, to limit AI chip exports to nations such as China and Russia, seeking to preserve its technological advantage in an increasingly tense geopolitical environment. Expected to be unveiled this week, the new restrictions will implement a three-tier system: top-tier U.S. allies will have unrestricted access to U.S. chips; second-tier, adversaries will face a complete ban on semiconductor imports; and third-tier countries, comprising most of the world, will encounter limits on the total computing power they can acquire. Nvidia (NVDA), a leader in AI hardware, has publicly criticized these measures, warning that they could hinder U.S. economic growth and threaten its technological leadership.

Huang has articulated that while national security is paramount, a balanced approach is crucial to sustain U.S. competitiveness in the AI sector, highlighting the delicate balance between security and economic innovation. Despite these challenges, Nvidia is pressing forward. At CES 2025, CEO Jensen Huang unveiled the GB10 Grace Blackwell Superchip, delivering a petaflop of AI performance at FP4 precision — a bold step toward democratizing AI computing power. This move aligns with Nvidia’s broader strategy to dominate AI while tapping into trillion-dollar markets like autonomous vehicles. Currently a $5 billion business for Nvidia, this sector is viewed as just the starting point.

To solidify its position, Nvidia has announced new partnerships with major automakers, including Toyota, Aurora, and Continental, to develop next-generation autonomous vehicle fleets. Even more intriguing, the company’s vision extends beyond autonomous vehicles into gaming, robotics, and other sectors poised for AI-driven innovation. With its chips in high demand and a track record of groundbreaking advancements, Nvidia is tackling regulatory and market challenges head-on, solidifying its influence across the tech landscape through relentless innovation and expansion. Huang’s announcements and Nvidia’s strategic direction illustrate a company that is playing the long game in tech, focusing on transformative technologies that could redefine industries. While the quantum computing sector faces a reality check, Nvidia’s approach to AI and its broader tech ecosystem underscores its commitment to shaping a future where technology not only advances but also navigates the... WallStreetPit does not provide investment advice.

All rights reserved. Nvidia’s (NASDAQ:NVDA) venture capital arm, NVentures, recently joined a $600 million funding round for Quantinuum, a quantum computing firm majority-owned by Honeywell (NYSE:HON), valuing it at an impressive $10 billion. This investment doubles Quantinuum’s valuation from $5 billion in January 2024, reflecting surging investor confidence in quantum technology’s potential. Alongside Nvidia, major players like JPMorgan Chase (NYSE:JPM), Mitsui, Amgen (NASDAQ:AMGN), and Quanta Computer also participated, underscoring the growing commercial promise of quantum computing. Nvidia’s CEO, Jensen Huang, has shifted his outlook, declaring quantum computing at an “inflection point” for practical applications, a stark contrast to his earlier 15- to 20-year timeline. This strategic move positions Nvidia to integrate quantum systems with its AI-driven GPU platforms, hedging against future disruptions.

With quantum investment soaring — $1.25 billion in Q1 2025 alone — are quantum computing stocks like Rigetti Computing (NASDAQ:RGTI), IonQ (NYSE:IONQ), and D-Wave Quantum (NASDAQ:QBTS) primed for a resurgence? Rigetti Computing is a pioneer in hybrid quantum-classical computing, and has been making strides with its 84-qubit Ankaa-2 system, boasting a 98% median gate fidelity. The company’s focus on integrating quantum processors with cloud-based classical computing has attracted partnerships with industry giants like Nvidia, with whom it collaborates to enhance GPU-accelerated quantum simulations. Rigetti’s recent contract with the Department of Energy and a partnership with Riverlane for error correction signal strong institutional backing. However, RGTI’s stock has been volatile, trading at around $14.60 per share this morning, down 31% from its all-time high in January. Daily stocks & crypto headlines, free to your inbox

By continuing, I agree to the Market Data Terms of Service and Privacy Statement Written by Keithen Drury for The Motley Fool-> IonQ's quantum computing approach yields more accurate results. Rigetti Computing has not yet been advanced to the next stage of a key government-funded quantum computing benchmarking initiative. The quantum computing investment landscape has shifted multiple times in 2025. At the start of the year, after an impressive December 2024, quantum computing pure-play stocks all sold off.

Throughout 2025, upward momentum returned, and several quantum computing stocks are on course for impressive one-year returns. However, these stocks all sold off starting in October as the market's appetite for risk declined. IonQ (NYSE: IONQ) and Rigetti Computing (NASDAQ: RGTI) are both well down from the highs they touched in October: IonQ is off by around 43%, while Rigetti is down about 60% from its peak. Could either one enjoy a resurgence in 2026? The entire Quantum Computing stock industry took a massive hit on Wednesday as NVIDIA CEO, Jensen Huang, made comments about the industry during the company’s investor day. Juang commented that “If you said 15 years for very useful quantum computers, that would probably be on the early side,”.

Juang followed-up with “If you said 30, it’s probably on the late side. But if you picked 20, I think a whole bunch of us would believe it.” Quantum computing has taken the lead role, in terms of performance, from Ai industry stocks over the last two months since Google announced the development of its “Willow” chip. The Willow chip demonstrates that quantum computers can solve specific problems much faster than classical supercomputers. Google announced that Willow performed a standard benchmark computation in under five minutes that would take one of today’s fastest supercomputers 10 septillion years. Google is the strongest candidate for quantum computing hardware breakthroughs over the next 5 years.

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