We recently compiled a list of the Jim Cramer Talked About These 9 Nuclear Power and Quantum Computing Stocks. In this article, we are going to take a look at where Quantum Computing Inc. (NASDAQ:QUBT) stands against the other nuclear power and quantum computing stocks.
Jim Cramer, host of Mad Money, recently cautioned investors about the risks of speculating in sectors like nuclear power and quantum computing, suggesting it could take a long time before these fields generate meaningful returns. While Cramer acknowledged the optimism that accompanies the start of each new year, he pointed out that sometimes the enthusiasm surrounding certain industries is misplaced.
“This year, I see two themes that I want to caution people about: nuclear power and quantum computing. Both have promise, someday, but that day is not, just not near enough to justify the current valuations for these stocks.”
He clarified that while he does not view quantum computing as a hoax, he considers the current expectations surrounding the technology to be overly ambitious. The market, according to Cramer, is setting a low bar for progress in this area.
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“Look, I believe in nuclear power, but when GE Vernova, the company that arguably has the most to gain from it, says discouraging things about an uptick in commercial nuclear power coming any time soon, when quantum computing seems very much in its infancy, well, I fear people will get hurt speculating on even the biggest companies, let alone the smaller ones.”
The outlook for quantum computing became more uncertain last week when Nvidia CEO Jensen Huang stated that “very useful” quantum computers are at least a decade away. During a Q&A at Nvidia’s Consumer Electronics Show Financial Analyst event, Huang suggested that 15 years might be an optimistic estimate, while 30 years could be more realistic. This timeline left little room for optimism among investors who had hoped for quicker breakthroughs.
Cramer acknowledged the speculative nature of these sectors but advised investors to be cautious and realistic about the potential for short-term gains.
“You can speculate of course, but please understand that, like at all New Years, the animal spirits are in play for a few stocks and I don’t want you to be trampled by wayward bulls with visions of riches in front of their greedy eyes. You own Rigetti?… Take some gains and then go out and buy yourself a nice cashmere sweater.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 2. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A data analyst pouring over a chart, the intricacies of its lines being revealed.
Quantum Computing Inc. (NASDAQ:QUBT)
Number of Hedge Fund Holders: 2
Talking about Quantum Computing Inc. (NASDAQ:QUBT), Cramer said:
“I’m also concerned about a company called Quantum Computing, $2.4 billion, with $400,000 in revenues in the last 12 months and again, very big losses.”
Quantum Computing (NASDAQ:QUBT) offers portable quantum machines, including Dirac systems and quantum random number generators, along with quantum authentication solutions for enhanced cybersecurity. Despite a significant stock increase of over 1,900% in 2024, this surge in value is largely disconnected from the company’s underlying business performance. The company currently reports a modest revenue of $386,000 over the past twelve months, a figure that remains relatively small in comparison to the company’s ambitions.
Like many quantum computing firms, the stock is considered high-risk, with its future largely influenced by technological advancements, costs, and the potential for commercial sales of quantum computers in the coming years. However, Quantum Computing (NASDAQ:QUBT) continues to face challenges, having reported an operating loss of $25 million over the last twelve months, highlighting the financial hurdles it must overcome.
Overall QUBT ranks 8th on our list of the nuclear power and quantum computing stocks Jim Cramer recently talked about. While we acknowledge the potential of QUBT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than QUBT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
