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When Jensen Huang, CEO of Nvidia (NVDA), takes the stage, investors hang on every word, knowing his insights can either propel the market or send it spiraling. Each of his appearances is a moment of high stakes not just for Nvidia but for its partners and the broader tech industry.
In the midst of several impressive company announcements, it only took a few comments from Huang to temper the buzz surrounding the tech sector’s latest ventures.
On Wednesday, stocks linked to quantum computing took a nosedive following Huang’s remarks that practical quantum computers are still many years away. While this isn’t a groundbreaking revelation, his stature on Wall Street and the eagerness for innovation made these words impactful.
Last month, when Google (GOOG, GOOGL) unveiled its Willow quantum chip, related stocks surged even though analysts conceded that practical applications are not in the immediate future.
Huang’s remarks, however, shifted the perception, turning quantum hopes into a burden. At Nvidia’s analyst day during CES, Huang suggested, “If you kind of said 15 years for very useful quantum computers, that would probably be on the early side. If you said 30, it’s probably on the late side. If you picked 20, I think a whole bunch of us would believe it.”
This forecast for potential revenue seems daunting for an industry accustomed to measuring success in quarterly results.
Following Huang’s comments, shares of Rigetti Computing (RGTI), D-Wave Quantum (QBTS), and IonQ (IONQ) plummeted by over 40%. These companies were riding high trajectories after Google’s December announcement, as investors were eager to invest in a revolutionary technology at its inception.
Huang’s reality check possibly prompted investors to cash in on stocks that had seen astronomical rises. Over the past year, Rigetti soared by over 900%, D-Wave Quantum nearly 600%, and IonQ about 150%.
While Google provided markets with tangible news, buoying the December rally, Huang’s prudent forecast seemed to deflate enthusiasm, causing shares to nose-dive.
It’s somewhat ironic that even as Wall Street hesitates on a supposedly transformative tech, it is simultaneously immersed in the AI revolution. Proponents of quantum computing envision it surpassing current data processing capabilities, heralding advancements in medicine, energy, and cybersecurity. Yet, if investors are already weary of AI’s unfulfilled promises, the possibilities of a technology even more speculative seem too abstract to value now.
