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When Nvidia (NVDA) CEO Jensen Huang speaks, the market scrutinizes every word, making every appearance a high-risk opportunity for a raise or stumble for the company, its partners and the industry at large.
Despite a series of impressive and explosive company announcements, a few lines from Huang smothered the technology’s new hope.
Linked actions quantum computing fell on wednesdayday after Huang’s comments that useful quantum computers are years away. This is not a new observation. But it moved markets because of Huang’s strong and growing status on Wall Street and the impatience for innovation he revealed.
When Google (GOOG, GOOGLE) announced Willow’s quantum chip last monthshares in the ecosystem rallied, though market analysts acknowledged that commercial applications are a long way off.
In contrast to Huang’s observations, quantum aspirations became dead weight.
“If you said 15 years for very useful quantum computers, that would probably be at the beginning. If you said 30, that would probably be at the end,” Huang said during Nvidia’s analyst day at CES on Wednesday. “If you picked 20, I think a lot of us would believe it.”
Forecasting potential revenue streams over the decades seemed too bearable for an industry that is measured by quarters.
Rigetti Computing Shares ( Rigetti Computing Shares )RGTI), D-Wave Quantum (QBTS), and IonQ (IONQ) all fell more than 40% after Huang’s comments. Quantum names are coming off massive advances, spurred by Google’s announcement in December, as investors scrambled to get in on a technology that could disrupt society as close to the ground floor as possible.
But Huang seemed to offer a reality check or a reason to offload stocks that hit skyrocketing heights. Over the past year, Rigetti has gained more than 900%, D-Wave Quantum almost 600% and IonQ almost 150%.
However distant the future applications of these companies may be, Google offered the market something concreteand helped the search giant pull off a December rally, raising players related to it. Meanwhile, the prognosis of a tech executive, though perhaps one of the brightest stars in corporate America, sent stocks into a ditch.
One irony of Wall Street backing away from a supposed paradigm-shifting technology is that the market is already knee-deep in AI transformation. Proponents of quantum computing see advances in the field as a path to surpassing conventional data processing, leading to advances in medicine, energy and cybersecurity. But if investors are already growing impatient with the promises of AI, the rewards of even wilder technology may seem too far away to savor.
