During the early premarket trading on Wednesday, it looks like comments from the Nvidia CEO during the previous session are weighing on quantum computing companies. Also, it is worth noting that yields in the US continue to rise, making this a difficult short-term environment for these stocks.
During the early Wednesday session, IonQ broke down pretty significantly in pre-market trading, which was facilitated by a statement yesterday made by Nvidia’s CEO that he did not believe quantum computing would be much of a factor for 10 to 15 years. So, the question then remains, is this a real thing? Probably not. This is probably going to end up being a buying opportunity, but you certainly don’t jump in right here. You wait for the market to stabilize.
After all, this is one man’s opinion, and although he is very educated in the computing world, he probably doesn’t really have a good grip on the timeline of how these things play out. After all, most things that are thought to be futuristic are always thought to be way out in the future and they tend to show up in about half the time expected. So, I suspect what we have is a situation where it’s a culmination between Jensen Wang speaking and interest rates in America skyrocketing. I do believe that this will be a value trade eventually, but I would not be surprised to see this thing fall all the way down to the $36 level.
Rigetti Computing is going to be in the same situation, losing about $4 in pre-market trading, but I think here you have a scenario which is going to be the same situation. Perhaps we will make it back down to the 50-day EMA, which would be a massive sell-off, as the 50-day EMA is currently hanging around the $8 level, but we’ll just have to wait and see.
Again, this is a momentum of stock, so you have to be careful. You want to wait for signs of stability, and maybe a little bit of a bounce before you get involved. But I, for one, am not shorting a stock based on a CEO’s opinion, especially one that could possibly end up being a competitor.
Finally, D-Wave Quantum has plunged in the early hours as well, as it looks like it is probably the closest one to the 50-day EMA, so that might be worth watching. Perhaps if you are trading these stocks, you can take a look at them as a group and try to get a signal from one and perhaps front run the others just have to wait and see.
Remember that these stocks are extraordinarily volatile, which is part of why people like them so much as D-Wave Quantum has reached as high as about $11.50 recently. But just mid-November was trading at about $1.50, so keep that in mind. These markets that go straight up in the air, they tend to correct violently, and the statements from the Nvidia CEO was probably just the excuse the market needed.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.