The Quantum Bubble Is Real Enough to Take Seriously

Key Points

• Quantum computing stocks have rallied sharply, but investors still need to weigh valuations against current revenue, profitability, commercial demand and cash burn.
• D-Wave and Rigetti both trade at extremely high sales multiples, with Rigetti’s revenue decline making future contract wins especially important.
• IonQ shows stronger revenue growth and commercial traction, but high R&D spending and potential dilution remain key risks across the sector.

As with the AI industry, investors often push the quantum computing industry aside as a "bubble." In both cases, however, it's important to acknowledge what this might mean. Quantum technology (like AI) is undoubtedly real and rapidly developing—even if it may not always be clear what the eventual end goal and use cases may be for those outside of the space. So concerns about a potential bubble have less to do with the technology itself and more with the question of whether current market valuations for quantum companies have grown too large too soon, given where that underlying tech is.

A balanced approach to evaluating a potential quantum bubble must consider valuations relative to revenue, profitability, commercial demand, cash run rate, and external threats.

The Valuation Growth Issue

Many pure-play quantum computing companies have experienced rapid share price appreciation in recent years: D-Wave Quantum Inc. NYSE: QBTS is up 68% in the last year, for instance, while Rigetti Computing Inc. NASDAQ: RGTI has climbed about 65% in that time.

Investors will want to see that revenue is also expanding in a way that supports valuation increases. In D-Wave's case, full-year 2025 revenue increased 179% year over year (YOY), while Rigetti's full-year 2025 revenue declined relative to the prior year. Despite D-Wave's impressive growth, revenue remained low in absolute terms, with the company reporting around $25 million for all of 2025.

To keep an eye on how valuation and revenue match up, investors will want to watch metrics like the price-to-sales ratio. Both companies recently traded at extremely high sales multiples, with D-Wave above 700 times sales and Rigetti even higher.

That gives investors reason to question whether those stock prices have moved too far ahead of current revenue.

Rigetti shows why that concern is not just theoretical. Unlike D-Wave, its 2025 revenue declined from the prior year, making future contract wins and revenue conversion especially important for the stock.

Profitability and Demand Concerns

It's not just sales that determine the viability of quantum computing firms. Profitability is essential as well. Many firms in this space still share traits, including negative operating margins and free cash flow, high spending on R&D, and continued reliance on capital from external sources. While this is typical for companies in their early stages (or in a nascent industry), investors will want to know if valuations are expecting profit levels that are still many years away from reality.

IonQ is a good example, particularly because it has some of the largest revenues of any firm in this industry (in Q1 2026, the company reported almost $65 million in sales, up 755% YOY). On top of strong sales growth, IonQ also has an advantage in that it is quickly building commercial traction—something that not all quantum firms have succeeded at so far.

Even still, with GAAP R&D costs more than tripling YOY to almost $126 million in Q1 2026, IonQ faces a massive hurdle in its profitability path. Like many other pure-play quantum names, in order to continue funding its technology development, IonQ must be prepared to find other sources of funding.

A Bright Spot: Cash Reserves

While cash run rates remain high, one bright spot for some pure-play quantum companies can be found in their cash reserves. IonQ ended Q1 2026 with $3.1 billion in cash, for instance, while D-Wave has been able to use its cash supplies to make an aggressive acquisition earlier in the year. This suggests that these companies have decent runways and are not in immediate danger of collapse. Investors will want to see signs that they are able to generate enough free cash flow over time to support their expenses, though.

Another question for investors is whether these companies are building their cash reserves in a way that is dilutive for shareholders. The industry has become known for capital raises through selling additional shares, a move that does provide near-term cash but which can sour the appeal for investors and signal longer-term issues.

The Looming External Threat

A final factor for investors to watch is the external threat posed by other tech firms on the quantum computing corner of the sector. Companies like D-Wave and Rigetti are tiny compared to rivals with burgeoning quantum arms like Intel Corp. NASDAQ: INTC and IBM Corp. NYSE: IBM, both of which have recently signaled plans to double down on their quantum operations.

Interest from legacy tech companies is likely to benefit quantum technology as a whole. However, it may be detrimental or even catastrophic for small firms already facing numerous pressures as described above. All of this contributes to the risk profile of these companies, which investors must keep in mind.