Why Is Arqit Quantum Inc (ARQQ) Plunging In 2025?

We recently published a list of Why These 15 Software Stocks Are Plunging In 2025. In this article, we are going to take a look at where Arqit Quantum Inc (NASDAQ:ARQQ) stands against other software stocks that are plunging in 2025.

The software sector has been anything but calm lately. These stocks were the darlings of Wall Street for the past few years but are now taking a beating due to tariff-related uncertainty and worries about AI’s lack of profitability.

News headlines have been almost entirely negative in the past two months due to weak macro data and big companies’ disappointing earnings results. This has caused a pivot toward profitability over growth.

Volatility often hides opportunity, and many of these software stocks are now oversold and can rebound when sentiment shifts. As such, it’s worth looking into the stocks that have plunged the most.

Methodology

For this article, I screened the worst-performing software stocks year-to-date.

I will also mention the number of hedge fund investors in these stocks. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A close-up of a computer chip, its intricate components safeguarding digital security.

Arqit Quantum Inc (NASDAQ:ARQQ)

Number of Hedge Fund Holders In Q4 2024: 8

Arqit Quantum Inc (NASDAQ:ARQQ) provides cybersecurity services through its QuantumCloud platform.

Investors are worried about most quantum computing stocks as profitability is still far away. The D-Wave breakthrough and Microsoft’s quantum chip did add some hype, but that doesn’t change anything for Arqit Quantum.

In February 2025, Arqit raised $13.6 million through a registered direct offering of shares at $2.50 each, along with issuing warrants for additional shares. Dilution like this is lucky as quantum computing is far from being profitable.

The consensus price target of $52 implies 193.29% upside.

ARQQ stock is down 54.38% year-to-date.

Overall, ARQQ ranks 4rd on our list of software stocks that are plunging in 2025. While we acknowledge the potential of ARQQ as an investment, 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 ARQQ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.