Investing.com -- Martin Shkreli, a controversial figure in the investment world, has recommended short selling quantum computing stocks. This comes in the wake of a significant rally in these stocks following Google’s announcement of a technical achievement termed "Willow" on December 9th. Shkreli believes these stocks are overvalued and likens the situation to the dot-com bubble.
Google’s announcement sparked interest in the quantum computing sector, which had been previously overlooked. The interest parallels speculative movements in areas such as nuclear fusion and memecoins, where a rush to gamble can be satisfied. Shkreli has recommended shorting stocks such as D-Wave Systems (QBTS), Rigetti (RGTI), IonQ (IONQ), and Quantum (NASDAQ:QMCO) Computing Inc (QUBT), stating that he does not believe quantum computing will have significant material impact on Alphabet (NASDAQ:GOOGL) (GOOG) or IBM (NYSE:IBM).
Shkreli has estimated the fair values of these stocks to be significantly lower than their current prices. For Rigetti (RGTI), the current price is $18.37, with a fair value of $1.00. IonQ (IONQ) is priced at $49.59, with a fair value of $11.23. D-Wave (QBTS) is at $9.55, with a fair value of $0.01, and Quantum Computing Inc (QUBT) is at $17.49, with a fair value of $0.01.
The concept of quantum computing was proposed by Feynman and Deutsch in the 1980s. They suggested that a computer capable of emulating nature’s quantum effects would be more capable of simulating reality. This led to scientists working to prove that a theoretical quantum computer could perform certain operations faster than a non-quantum computer. However, this "faster" is defined by complexity, which requires someone to build the computer at a scale where the quantum computer’s speed surpasses the non-quantum computer’s.
Following the discovery of critical algorithms that made quantum computing appealing, several developers began efforts to create such machines. Two of the major algorithms that get most of the discussion are Shor’s and Grover’s. These algorithms theoretically allow a quantum computer to run a factoring algorithm faster than a traditional computer could, in what is called algorithmic time.
D-Wave Systems (NYSE: QBTS) was the first company to focus on quantum computing systems. The company went public via a SPAC in 2022 after struggling as a private company. D-Wave’s quantum annealers are not considered "real" quantum computing and can only perform a very specific function that has not been commercially viable in the company’s 25-year history.
Rigetti Computing (RGTI) is the first ’real’ quantum computing company. Unlike D-Wave, Rigetti does make actual quantum computers. However, they don’t work. Rigetti is seen in the quantum industry as a third-tier competitor.
IonQ (IONQ) is a more substantial company than Rigetti at first glance, he said. Their technique is to use trapped ions, which is literally what it sounds like, to store quantum information, instead of the superconducting transmon circuits that are popular in the industry. These ions are held at room temperature, which is a strong advantage over superconducting. However, they have to be put in extremely low-pressure vacuums and controlled with lasers to have almost zero energy.
Meanwhile, Shkreli thinks Quantum Sciences Inc. (QUBT) is entirely worthless. Retail investors are so desperate for exposure, they have also purchased shares in two non-quantum computing companies which happen to have the word quantum in their names: Quantum (QMCO) and Quantum-Si (QSI).
In conclusion, Shkreli believes that quantum computers are fifteen to thirty years away from being useful and that the types of problems quantum computing can solve are not really the computational problems facing scientists, researchers, and programmers today. He suggests that quantum will only help a few nerdy people, like him, study cryptography and odd, but useless mathematical problems, more easily. That is not a big industry.
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