Why shares of Rigetti Computing, IonQ, D-Wave Quantum and Quantum Computing all exploded higher on Wednesday

What goes up must come down. But what breaks down can bounce back, especially when it gets a big boost from Microsoft (MSFT 2.56%).

That’s what’s happening Wednesday, as quantum computing investors applaud the kind words of Microsoft’s chief strategic and technology officer, Mitra Azizirad, who last night urged quantum computing investors to prepare, because ” we are on the cusp of seeing quantum computers solve significant problems.” problems and capture new business value.

Supporting this emotion, the actions of Computers Rigetti (RGTI 22.23%) shares soared 25.6% through 10:25 a.m. ET this morning. IonQ (IONQ 33.48%) also joins the party, up 26.9%, while Quantum D-Wave (QBTS 22.41%) gained 31.1%. Best of all is Quantum computing (QUBT 55.45%)which rose 44% in the first hour of trading on Nasdaq.

Volatility, your name is quantum

What a difference a week makes!

It was only last week, if you recall, that quantum computing stocks collapsed under the weight of negative comments from Nvidia (NVDA 3.40%) CEO Jensen Huang, who warned that it will likely be 20 years before quantum computers are capable of doing anything “very useful” for customers. Metaplatforms (META 3.85%) CEO Mark Zuckerberg quickly ramped up his own negative comments, and in no time, quantum stocks were in freefall, losing 50%+ of their respective market caps in less than a week.

Today, the quantum computing stock market is reversing significantly – and it’s no wonder. Last night, on his Microsoft blog, Azizirad declared 2025 “the year to become Quantum ready.” The Microsoft executive says that “the pace of quantum research and development will only accelerate (over) the next 12 months.” And that means – whether or not it takes 20 years for quantum to become “very useful” companies — from an investor’s perspective, 2025 will be a year full of positive PR on quantum progress.

This alone should be very good news for quantum computing stock prices, regardless of what happens to these stocks’ financial results.

Cautions and Reservations

But the further quantum stock prices move away from companies’ underlying fundamentals, the more overvalued they will become – and the riskier it will become to invest.

Consider: The four quantum stocks mentioned above have a combined market cap of around $12.6 billion after today’s rally. However, none of these companies are currently profitable. Indeed, if we add up all their revenues, they collectively generated less than $60 million in revenue over the past 12 months.

The result: Quantum computing stocks are selling for a total of a staggering 210 times their tiny earnings.

Certainly, some quantum stocks are worse than others. Quantum Computing, for example, may have been smart enough to snag the phrase “quantum computing” for its name, but the $386,000 in revenue accrued over the last year means that, with a market cap of nearly of $1 billion, Quantum Computing’s stock is selling for nearly 2,500 times sales. In contrast, IonQ, with a market cap of $6.4 billion but with revenue of $37.5 million, appears to be a bargain at just 170 times sales.

(Note: 170 times sales isn’t a bargain in reality, only relative to the even more insanely expensive stocks we’re comparing it to.)

If you absolutely must invest in quantum, just buy Google

Long story short, if you think you absolutely have to invest in quantum, your best bet is probably to buy the stock that started this quantum frenzy in the first place: Alphabet (GOOG 3.10%) (GOOGL 3.11%). In addition to owning the Willow quantum chip and being profitable, with a valuation of just 7x sales, Alphabet is also by far the cheapest way to invest in quantum today.

Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of the board of directors of The Motley Fool. Rich Smith holds positions in meta platforms. The Motley Fool holds positions and recommends Alphabet, Meta Platforms, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.