The fortunes of major quantum computing firms turned negative this week as share prices sank—in some cases by double digits.
The so-called Quantum Four publicly traded companies—Rigetti Computing, IonQ, Quantum Computing Inc, and D-Wave Quantum—saw their stock prices tumble on Thursday. And as of this writing, all four companies are down even lower in premarket trading on Friday.
Berkeley, California-based Rigetti (NASDAQ: RGTI) has seen the biggest drop, with its stock price falling almost 15% on Thursday, October 16. As of this writing, the stock was down another 7.65% during the premarket session.
Shares of IonQ (NYSE: IONQ) were down by a similar amount on Thursday, although their 2.23% drop on Friday has not been quite as steep.
Quantum Computing Inc (NASDAQ: QUBT) fell by 11.73% on Thursday, while D-Wave (NYSE: QBTS) was down 9.65%.
Why are quantum computing stocks down?
There doesn’t seem to have been any market-moving negative news specific to the quantum computing space. In fact, D-Wave had just announced on Wednesday a $12 million deal to bring its much-hyped Advantage2 computer to Italy.
However, the broader stock market experienced shocks on Thursday after regional bank Zions Bancorporation accused some of its borrowers of fraud and warned that it would take a large loss, as the Wall Street Journal reported.
This disclosure has sparked fears about the credit health of regional banks more broadly, and those fears appear to be spilling into the markets.
Stock futures were all in retreat on Friday morning as investors continue to digest the news. In the meantime, some may be gravitating toward safe-haven assets like gold, which just set yet another record this week when it topped $4,300 per ounce.
Quantum computing investors may be profit-taking
All four of the major quantum computing firms have had enormous runs over the last 12 months, with shares of Rigetti soaring almost 5,000% over that period.
With markets turning negative and troubling signals emerging from the banking sector, it’s natural that investors in quantum computing might be inclined to sell off some of their shares while profits are high.
Although quantum computers are seen by many experts as a transformative technology that could reshape the industry, the space is still highly speculative, and some have argued that the stocks are currently overvalued.
What happens next is anyone’s guess.