Nvidia's CEO Pumped Quantum Computing, But It's A Stock To Avoid

(9min)

Summary

  • Despite recent stock surges fueled by industry optimism (like Jensen Huang's comments), Quantum Computing Inc.'s fundamentals still suggest "wishful thinking" prevails, warranting a continued "Hold" rating.
  • QUBT's Q1 FY 2025 showed a significant revenue miss and an EPS beat driven by non-cash gains, not operational profit, alongside declining gross margins and rising OPEX.
  • Positive steps include the Arizona foundry completion and new collaborations, supported by a strong cash position from recent offerings, but tangible revenue impact remains to be seen.
  • The market's enthusiastic reaction to general quantum news, especially Nvidia's CEO's remarks, seems overblown for QUBT, as peers admit commercial viability is still years away.
  • Significant competition from tech giants and QUBT's lack of breakeven visibility make its current market capitalization questionable, reinforcing a cautious "Hold" stance despite industry buzz.

3D illustration of a working quantum computer. Quantum computing concept

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My Thesis Update

In early December last year, I wrote my 1st article on Quantum Computing Inc. (NASDAQ:QUBT) stock, calling it a speculative bet given its meteoric rise in a matter of a few weeks in

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This article was written by

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Oakoff Investments is a personal portfolio manager and a quantitative research analyst with 5 years helping readers find a reasonable balance between growth and value by sharing proprietary Wall Street information.

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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