Why Is D-Wave Quantum Stock Skyrocketing Today?
Key Points
A banking giant said that it plans to invest billions of dollars in several key industries, including quantum computing.
The news sent quantum stocks across the board flying, including D-Wave.
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Shares of D-Wave Quantum (NYSE: QBTS) are soaring on Monday, up 25.2% as of 1:59 p.m. ET. The spike comes as the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) both showed strong gains.
The quantum computing stock is flying after JPMorgan Chase said it plans to deploy up to $10 billion across several industries, including quantum computing, as part of a sweeping national security investment program it calls the Security and Resiliency Initiative.
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In a statement, CEO Jamie Dimon emphasized the program's importance, saying, "Our security is predicated on the strength and resiliency of America's economy. America needs more speed and investment."
Image source: Getty Images.
D-Wave's valuation is sky-high
I think investors are getting ahead of themselves. Pure-play quantum computing stock valuations are reaching levels divorced from reality; there is clearly an enormous amount of hype in the market at the moment. JPMorgan naming quantum directly shows that the technology is important, but it was just one of 27 areas of investment named and was listed under "frontier and strategic technologies."
D-Wave's $14 billion market cap is hard to justify, with sales last year of just $8.8 million. There is enormous potential in quantum computing, but it is just that at this point: potential.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.
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