Quantum Computing: A Real Technology With a Valuation Problem
Quantum Computing: A Real Technology With a Valuation Problem
The quantum computing market reached an estimated $1.8–3.5 billion in 2025, depending on methodology, with projections ranging from $5.3 billion by 2029 to $20.2 billion by 2030, per SpinQuanta and MarketsandMarkets. McKinsey's Quantum Technology Monitor forecasts $97 billion in quantum technology revenue by 2035.
The technology is advancing. The valuations have advanced faster.
What Has Actually Changed
Quantum computing crossed an inflection point in 2025. Vendors moved beyond theoretical fault-tolerant architectures into early engineering reality, per Forrester's March 2026 report. The measure of progress shifted from raw qubit counts to error-corrected logical qubits. IBM targets scientific quantum advantage by 2026, fault-tolerant modules by 2027, and machines executing one billion gates on 2,000 qubits by 2033. Google aims for error-corrected systems by 2029.
Hybrid quantum-classical systems are showing early utility. Procter & Gamble demonstrated value combining quantum and classical solvers to reduce optimisation runtimes from hours to minutes, per Forrester. Industrial pilots are emerging in finance, pharma and logistics, per Quandela. Quantum sensing is generating revenue in navigation, mining and defence, per The Quantum Insider.
But fault-tolerant machines remain years away. No quantum solution has become commercially indispensable. The industry is in the noisy intermediate-scale quantum (NISQ) era — important but transitional.
The Stock Market Has Priced in the Destination, Not the Journey
Pure-play quantum stocks have produced extraordinary returns. IonQ surged 712% over twelve months. D-Wave rose 3,670%. Rigetti posted 5,700%. These gains occurred largely in 2025, driven by momentum and retail speculation rather than revenue milestones.
The fundamentals diverge sharply. Rigetti reported $7.5 million in trailing revenue against a $5.3 billion market cap. D-Wave generated $24.1 million with a cap above $7.2 billion, per Intellectia.AI. IonQ's revenue tripled to $130 million — a genuine milestone — but its $12.1 billion cap still implies a price-to-sales ratio far exceeding dot-com peaks.
Grand View Research estimates the quantum computing market will reach just $4.2 billion by 2030 — 425 times smaller than the projected AI market. As one analyst noted, for Rigetti to merely match the richest S&P 500 valuations, the stock would need to fall 94%.
What Could Go Right
Government spending is accelerating across the U.S., EU, China and Japan. Defence and aerospace are early adoption sectors. Post-quantum cybersecurity is creating demand as organisations prepare for Q-day — when quantum machines could break current encryption. McKinsey reports $2 billion deployed into quantum startups in 2024, up 50% from 2023. The pipeline of hybrid applications in drug discovery, materials science and financial modelling is broadening.
What Investors Should Weigh
The technology is real and progressing. Forrester now considers practical quantum utility plausible by 2030 — earlier than its 2024 assessment. But plausible is not certain, and 2030 is not 2026.
The disconnect between current revenue and current valuations in pure-play quantum stocks is severe by any historical standard. Multiple analysts have drawn explicit parallels to the dot-com bubble, noting that peak price-to-sales ratios for Microsoft, Amazon and Cisco before the 2000 crash ranged from 31 to 51 — far below where quantum pure plays trade today, per Yahoo Finance analysis.
Investors with a decade-long horizon may find the sector compelling at the right entry point. Those buying at current multiples are betting that commercial breakthroughs arrive on schedule and that the market has not already priced in years of future growth. Diversified exposure through IBM, Alphabet or Honeywell — where quantum is one division within a revenue-generating enterprise — carries materially less risk than pure-play positions trading at thousands of times sales.