Buy or Sell Quantum Computing Inc. Stock At $15?
Quantum Computing Inc. (NASDAQ: QUBT), a company developing quantum-compatible chips and photonic hardware for high-performance computing, AI, and cybersecurity, saw its stock plunge 7% on October 22 amid a larger pullback in quantum stocks driven by uncertainty surrounding shifting U.S. policy toward technology exports to China and Google’s Willow announcement. Google’s Willow chip ran a repeatable algorithm 13,000 times faster than the world’s best supercomputers for a specific task. This milestone, called “verifiable quantum advantage,” proved that quantum systems can outperform classical computers in a reproducible way.
Here’s the thing – despite its recent fall, we think QUBT stock isn’t worth the risk at current prices around $15. While quantum computing as a technology has incredible potential, this particular stock presents a lot of red flags. Before we delve into why investors should stay away, if you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 105% since its inception. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
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Image by Pete Linforth from Pixabay
Why Traditional Fundamentals Don’t Tell the Full Story
Here’s the uncomfortable truth about analyzing quantum stocks: traditional fundamentals have limited predictive value when commercial applications remain years away. Industry experts predict commercial quantum computing applications won’t arrive until 2030 at the earliest, with Google’s head of Quantum AI suggesting a five-year timeline and more conservative estimates pushing practical applications to 2035-2040.
However, within fundamentals, cash flow analysis remains critically important because these companies are burning through capital at unsustainable rates while generating minimal revenue. QUBT exemplifies this perfectly – the company posted operating cash flow of negative $19 million against revenues of just $0.3 million, creating an OCF margin of negative 7,181%.
What’s Wrong with QUBT’s Business Model?
The fundamental problem is simple: QUBT isn’t making meaningful money. Revenue declined 21.5% to just $0.3 million over the last 12 months, with quarterly revenue plummeting 66.7% to only $61,000 in the most recent quarter. To put this in perspective, the company operates at a scale smaller than most food trucks, yet carries a $4 billion market cap.
How Expensive is Too Expensive?
QUBT trades at astronomical valuation multiples, with a price-to-sales ratio of 8,790 versus 3.2 for the S&P 500. For context, you’re paying nearly 9,000 times the company’s annual sales to own a piece of QUBT – that’s not investing, that’s speculating on lottery tickets.
Can You Afford These Losses?
The company is hemorrhaging cash at an alarming rate. QUBT posted a net loss of $76 million on revenues of just $0.3 million, resulting in a net income margin of negative 29,054%. To understand this magnitude: for every dollar of revenue, the company loses $290. Even Tesla at its worst never achieved such inefficiency.
Like we said before, the fundamentals won’t make much sense as the story is all about speculation of future with quantum and QUBT’s place in it.
Is There Any Silver Lining?
QUBT does have one strength: financial stability. The company maintains minimal debt of $1.5 million against its $2.1 billion market cap, creating a debt-to-equity ratio of just 0.1%. Cash comprises 81.9% of total assets at $349 million, providing substantial runway.
However, this cash position exists primarily due to recent fundraising activities totaling over $1 billion in 2025, including a $200 million June financing. Without revenue growth, this cash becomes a countdown timer to insolvency.
How Has QUBT Performed During Market Stress?
The stock’s downturn resilience is weak. During the 2022 inflation shock, QUBT plunged 93.1% from peak to trough versus 25.4% for the S&P 500. In the 2020 COVID pandemic, it fell 72.9% compared to 33.9% for the broader market. When markets get nervous, speculative quantum stocks like QUBT get massacred first.
Recent performance confirms this pattern, with the stock declining 35% in just one week and falling 26.5% over the past month as investors flee to established tech companies. See our take on – What’s The Downside Risk For Quantum Computing Inc.? – for more details.
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What About the Future?
Management suggests substantial revenue from photonic chip operations may be “12 to 18 months away,” but this represents hope, not certainty. The quantum computing industry remains in its infancy, with commercial applications still largely theoretical. Meanwhile, QUBT faces widening loss estimates for 2025, from 17 cents to 25 cents per share according to recent analyst revisions.
The Bottom Line
QUBT presents a perfect storm of weak growth, very weak profitability, and weak downturn resilience despite strong financial stability. The company trades at valuations disconnected from fundamental reality, burning cash faster than it generates minimal revenue.
Why pay nearly 9,000 times sales for a company losing $290 for every dollar of revenue when you could own profitable, growing technology companies at reasonable valuations? For instance, take a look at our take on – Google’s Unloved Stock Finally Gets Its Due.
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