Popular quantum computing stocks have been surging following a slew of positive news flow but this valuation metric shows that the stocks could be overly expensive. While some analysts stay positive, others believe these could be subject to “manipulation.”
What Happened: Stocks like Rigetti Computing Inc., Quantum Computing Inc., D-Wave Quantum Inc. and IonQ Inc. have registered a triple-digit gain over the last six months and one year. The exchange-traded fund tracking these stocks, Defiance Quantum ETF, rose 26.29% in the last six months and 53.69% over a year.
Since these quantum computing companies are still in their growth phase and currently have negative earnings, using the price-to-earnings ratio is not possible while estimating their valuation.
However, the price-to-sales ratio, found by dividing a company’s market capitalization by its total sales, can be used to value such firms. According to the data from Bloomberg, the P/S ratio for these companies is also quite high.
“Under the present situation of quantum stocks becoming totally divorced from reality, the best course of action for investors is to be patient,” he said.
According to him, these stocks are being pumped by the meme crowd and “It is a grave mistake to emulate meme crowd behavior and become prey of the manipulators.”
Why It Matters: The quantum computing sector experienced a surge of interest following Google’s December 2024 announcement of the Willow chip.
Following Microsoft’s lead, Nvidia announced the first-ever Quantum Day at GPU Technology Conference 2025, signaling a growing industry interest in the technology.
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