The Quantum Computing Stock Risk Everyone (Even Wall Street Analysts) Is Missing

Although artificial intelligence (AI) sports the largest addressable global opportunity of any game-changing trend on Wall Street, AI stocks took a back seat to the advent of quantum computing in 2025.

As of mid-October, pure-play quantum computing stocks IonQ (NYSE: IONQ), Rigetti Computing (NASDAQ: RGTI), D-Wave Quantum (NYSE: QBTS), and Quantum Computing Inc. (NASDAQ: QUBT) rallied by as much as 6,200% over the trailing 12-month period. These are potentially life-altering returns for investors who had confidence in this very early stage technology.

Image source: Getty Images.

While there are plenty of catalysts in the sails of quantum computing stocks (I'll touch on these in a moment), there's also no shortage of risks. Even though some of these risks are front and center, investors (including Wall Street analysts) appear to be overlooking the biggest headwind of all for pure-play quantum computing stocks.

Quantum computing is an up to $850 billion global opportunity

Although quantum computing can't match the multitrillion-dollar global addressable market that AI brings to the table, it's no slouch. Quantum computers can create between $450 billion and $850 billion in global economic value by 2040, based on a forecast from Boston Consulting Group. If accurate, this would yield a long list of winners in this space.

The most logical beneficiaries would be the aforementioned pure-play stocks: IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. Shares of these companies have been propelled by the practical application of quantum computers, brand-name clients, and the prospect of significant future investment.

Quantum Computing 1 Year Returns 🤯$RGTI +6,217% $QBTS +3,912%$QUBT +2,798%$IONQ +670% pic.twitter.com/tzSN5ZqVjj

-- Connor Bates (@ConnorJBates_) October 13, 2025

On paper, quantum computers have a wide range of uses. They can run molecular interaction simulations to help drug developers tackle hard-to-treat diseases, are capable of reducing the vulnerability of cybersecurity platforms, and can speed up the learning curve for AI algorithms, to name a few applications.

Investors have also rallied around the early stage commercialization of quantum computers. For instance, the quantum cloud services from Amazon and Microsoft are both allowing their subscribers access to IonQ's and Rigetti's quantum computers. Landing members of the "Magnificent Seven" as customers is something Wall Street is bound to reward.

But perhaps the premier catalyst in 2025 for quantum computing stocks was JPMorgan Chase unveiling its $1.5 trillion Security and Resiliency Initiative in mid-October. The nation's largest bank by total assets identified 27 sub-areas for financing or investment over the next decade -- and quantum computing was among them.

Image source: Getty Images.

Investors are overlooking the biggest risk for quantum computing stocks

However, the potential for big reward comes with sizable risk on Wall Street, and quantum computing is no exception.

Some of these headwinds are well-known. For example, every game-changing technology, looking back more than three decades, has experienced an early innings bubble. The reason game-changing innovations endure bubble-bursting events is that investors commonly overestimate the adoption and/or optimization of new technologies.

In the case of quantum computing, it falls short in both aspects. It's so early in the commercialization stage that we haven't observed widespread adoption. At the same time, it's expected to take years before quantum computers are more cost-effective than classical computers for practical problem-solving. If history repeats, pure-play stocks IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. would take it on the chin.

Another front-and-center headwind for high-flying quantum computing stocks is share-based dilution. Collectively, these four pure-play stocks issued more than $4.1 billion in common stock and warrants in 2025 to raise capital. Since their operating models are unproven, they're likely to continue leaning on share issuances to fund their operations. That's bad news for existing shareholders.

But there's an even greater risk for IonQ, Rigetti, D-Wave, and Quantum Computing Inc. that everyone seems to be overlooking: the Magnificent Seven.

Although pure-play quantum computing stocks have a well-defined first-mover advantage, the barrier to entry in this space isn't high. Whereas first movers have unproven operating models and are forced to sell shares to keep the lights on, members of the Magnificent Seven are generating copious amounts of cash from their operations, and they aren't afraid to aggressively invest in game-changing innovations.

Think about how much capital companies like Amazon, Microsoft, Meta Platforms, and Alphabet are investing in the AI revolution. As quantum computing matures as a practical problem-solving technology, you can rest assured that these cash-rich companies will devote capital to getting their piece of the pie.

You might be surprised to learn that select Magnificent Seven companies are already infiltrating the quantum computing arena. In December 2024, Alphabet unveiled its Willow quantum processing unit (QPU), while Microsoft debuted its Majorana 1 QPU two months later. In October, Alphabet announced that Willow successfully ran a quantum computing algorithm at a processing speed approximately 13,000 times faster than the speediest supercomputer.

The Magnificent Seven have profitable foundations, extensive treasure chests, and can quickly expand their reach through acquisitions. None of this applies to pure-play quantum computing stocks.

By the time quantum computers become cost-effective for practical problem-solving, there's the real risk of IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. being yesterday's news.

JPMorgan Chase is an advertising partner of Motley Fool Money. Sean Williams has positions in Alphabet, Amazon, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, IonQ, JPMorgan Chase, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.