Quantum computing stocks took a sharp hit on Tuesday after investors reacted negatively to Palantir’s (PLTR) third-quarter results. The sell-off in Palantir shares spread across the broader AI and quantum computing space. Notably, U.S.-based quantum computing companies, including IonQ Inc. (IONQ), Rigetti Computing (RGTI), D-Wave Quantum (QBTS), and Quantum Computing (QUBT), went down sharply on Tuesday.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The sell-off also dragged down several high-growth names in the AI sector. AI voice recognition company SoundHound AI (SOUN) declined over 12%, while cloud AI companies CoreWeave (CRWV) and Nebius (NBIS) fell over 8%.
What Went Wrong with Palantir’s Earnings?
Palantir reported a strong 63% revenue jump to $1.18 billion in Q3. The company delivered its ninth straight earnings beat and an upgraded Q4 outlook. However, PLTR stock slipped almost 8% over valuation fears. The challenge for investors is clear: no matter how solid the performance, Palantir’s rich valuation makes it vulnerable to such reactions.
Additionally, PLTR stock was also hit after recent filings revealed that renowned short seller Michael Burry has placed bearish bets against Nvidia (NVDA) and Palantir.
Why were Quantum Stocks Down?
Quantum computing stocks fell alongside the broader market as bearish sentiment hit high-growth names. Investors took profits on richly valued stocks, dragging down quantum computing companies such as IonQ, D-Wave, and Rigetti.
Overall, quantum stocks are considered speculative and volatile because the industry is still in its early, unproven stage. Investors are essentially betting on breakthroughs in technology and commercialization that could be years away. Most companies in the sector have yet to generate profits, and their valuations are driven more by future potential.
As a result, even small changes in sentiment or related tech news can cause big price swings. Low liquidity and high retail investor interest also add to the volatility.
Investors Await Quantum Computing Earnings
Looking ahead, quantum computing firms are gearing up to report their third-quarter results this week and next. IonQ will release earnings on November 5, followed by D-Wave Quantum on November 6, and Rigetti Computing on November 10.
Over the past few quarters, these companies have posted strong revenue growth, even as profits remain under pressure. As early-stage players, they continue to focus heavily on R&D and commercialization. With Q3 results approaching, investors are watching to see whether continued momentum in revenue, customer adoption, and technology advancements can ease concerns about ongoing losses and cash burn.
RGTI, QBTS, IONQ, QUBT: Which Quantum Stock Offers Higher Upside, According to Analysts?
Using TipRanks’ Stock Comparison Tool, we have compared quantum stocks to see which stock offers higher upside to investors.
Among these four, IONQ and QBTS stocks have Strong Buy ratings from analysts. In terms of share price growth, QUBT stock offers the highest upside of over 130% at an average price target of $32.50. Below is a screenshot for reference.
