Why Has Jim Cramer Soured On Quantum Computing Stocks?

The AI boom of 2024 generated massive growth for stocks like Nvidia and Broadcom. One tech sector that looked to be benefiting massively from this was quantum computing. Companies like Rigetti Computing saw their stock surge by several hundred percent in late 2024. Although AI-related stocks are still hot, quantum computing stocks are sinking and CNBC's Jim Cramer is advising investors to sell. Benzinga examines why this once-hot sector is running so cold.

Cramer's comments were part of his warning to investors against getting overexposed to an increasingly unstable investing environment surrounding some tech stocks. However, he singled out quantum computing in identifying market sectors that may be getting overheated; a situation that usually leads to a lot of speculative buying that drives prices up before a precipitous fall.

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Cramer said, “I can’t be part of this froth. I always want you to stay in this game, but I couldn’t save the people who refused to sell their red-hots. They were too greedy. And then they were too poor." On his show, Cramer described quantum computing stocks as "the worst of the excess,” and it's not hard to see why. In late December, stocks like Rigetti Computing and IonQ were surging and it looked like the sky was the limit.

Rigetti opened December trading in the $3-$4 range before skyrocketing to nearly $20 in the first weeks of 2025. Although quantum computing certainly did and still does have potential, it eventually became clear that a lot of its surge in value was fueled by investor speculation that Rigetti's bespoke quantum computers would revolutionize AI. This led everyone who "missed" out on Nvidia to jump in with both feet.

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It was all going well until Nvidia CEO Jensen Huang threw cold water on the concept of quantum computing by saying the technology was "15-30 years away" from being viable. Those comments did more than stop Rigetti Computing in its tracks. They sent its stock price tumbling by 45%. Other quantum computing stocks like IonQ and D-Wave Quantum also fell by 35-39%.

Investors who bought stocks like Rigetti Computing at $3 are still in the black, but they certainly had a lot of profit wiped off the table in an instant. The investors who bought at $19 or $20 on the expectation that Rigetti's upward momentum would continue indefinitely took some pretty big losses. Their dreams of Rigetti surging to $40 or $50 have been replaced by hopes of a rally that allows them to at least break even.

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Although the pullback came as a nasty surprise for many investors, Cramer believes it was inevitable. As popular as Rigetti and other quantum computing stocks were for their future potential, their balance sheets make for some unpleasant reading from an investor's perspective. Most of them are not making money and are still in the stage where they are pouring tons of cash into developing products that may or may not be viable.

That explains why Cramer is urging investors to hit the escape hatch. “I think all these frothy stocks remain vulnerable. You own a stock with AI in the name, you could be in trouble," he said "You own a hyped-up alternative energy company, especially one connected to nuclear power, you need to ring the register tomorrow. They’ve come too far too fast for a technology that can take over a decade to deploy.”

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