Quantum computing stocks are tumbling this morning after Nvidia (NVDA) CEO Jensen Huang contended yesterday that the technology would not be “very useful” for decades.
Among the widely held names in the sector diving more than 30% are Rigetti Computing (RGTI), D-Wave Quantum (QBTS), Quantum Computing (QUBT), and IonQ (IONQ).
A modern computer datacenter, running an advanced quantum computer system.
Speaking at Nvidia’s Analyst Day, Huang suggested that quantum computers may not make meaningful contributions for 15 years. But he added that many people “believe” that the technology will be “very useful” in 20 years.
Some Companies Are Generating Revenue, But Valuations Are Huge
In the quantum sector’s defense, many firms in the space are generating some revenue and signing deals with the U.S. government. For example, last month Quantum Computing announced that NASA had agreed to utilize its quantum optimization machine, while IonQ disclosed in September that it had obtained a $54.5 million contract from the U.S. Air Force Research Lab.
In the third quarter, Quantum Computing generated $100,000 of sales, and IonQ reported $12.4 million of revenue.
But firms in the sector have huge market capitalizations, even after today’s pullbacks. Illustrating this trend, Quantum Computing’s market capitalization is $1.4 billion, while IONQ has a market cap of $7.2 billion.
While we acknowledge the potential of RGTI, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RGTI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ ALSO 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock
Disclosure: None. This article is originally published at Insider Monkey.