Cathie Wood: Quantum computing is decades away from 'disruption'

Last January, Nvidia (NVDA) CEO Jensen Huang sent quantum computing stocks plummeting after he offered a much more conservative estimate than the general consensus of when the technology would become commercially available.

While many people within the industry see quantum computing reaching commercialization in the next five years in a best-case scenario, or roughly a decade if they're being more cautious in their projection, Huang wasn't buying either timeline.

"If you kind of said 15 years for very useful quantum computers, that would probably be on the early side. If you said 30, it's probably on the late side," Huang said. "If you picked 20, I think a whole bunch of us would believe it."

Shares of all the biggest names in the space immediately plunged after Huang's comments.

Rigetti Computing (RGTI) plummeted 45%, D-Wave Quantum (QBTS) crashed 43%, IonQ, inc. (IONQ) sank 39% and Quantum Computing Inc. (QUBT) dropped 36%.

Huang later walked back his comments on the sector, saying in March that he was "wrong" in his projections, and then in June went even further by declaring that quantum computing "is reaching an inflection point" during Nvidia's GTC Paris developer conference.

Not surprisingly, quantum stocks all rallied following Huang's mea culpa.

However, Ark Invest founder Cathie Wood has now become the latest influential tech luminary to pour cold water on the sector, asserting last week in her Big Ideas 2026 report that quantum computing is "unlikely to be disruptive for 20 to 40 years."

Wood notes that in order for a technology to be disruptive, it "requires a steep cost decline crossing key price-points that open compelling unit economics across multiple sectors and serves as a platform for additional technological innovation."

While quantum computing is expected to eventually serve "as a platform for additional technological innovation," especially with artificial intelligence, Wood points to what she sees as a slower pace to reaching that point than perhaps other disruptive technology.

"Quantum computing’s performance improvement curve has been slow," she said. "Despite spending billions in research and development (R&D), Google doubled qubits only once in more than four years."

Although there has been considerable media coverage given to fears of an AI bubble, some analysts are also pointing to a potential bubble within the quantum computing sector, especially since stocks have surged despite profitability being years away.

For instance, D-Wave's shares have soared 325% over the past 12 months, while Rigetti's have gained 74.1% during the same time period.

Tom Hulick, CEO of Strategy Asset Managers, told Barron's in October that the valuations for quantum stocks are “too divorced from reality” for long-term investors.

“There is no ceiling for how high retail speculators can push a stock in the interim,” he said.

In her observation of quantum computing's progress, Wood cites Moore's Law, which measures how technology evolves by positing that the number of transistors on computer chips doubles approximately every two years.

“Even if its performance and costs were to improve markedly, achieving Moore’s Law’s pace, quantum computing would not be useful for cryptographic decryption until the 2040s,” she said.