Some investors on Wall Street worry that artificial intelligence (AI) stocks have become too expensive.
While technology stocks generally have become frothy, I think quantum computing is the tech segment most at risk of a steep correction.
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For the last three years, one theme has dominated the stock market: artificial intelligence (AI). Since the end of 2022 — when OpenAI kicked off the AI revolution with the commercial launch of ChatGPT — shares of the Roundhill Generative AI & Technology ETF and the Invesco QQQ Trust have soared by 137% and 84%, respectively — each handily outperforming the S&P 500 (SNPINDEX: ^GSPC).
This level of prolonged momentum, and the resultant higher valuations of some of the tech stocks that drove it, have led some on Wall Street to assert that AI stocks are in a bubble. Indeed, it’s hard to deny that the market has become frothy.
However, many of the biggest gainers in these technology ETFs — namely, the “Magnificent Seven” — arguably trade at relatively reasonable valuations when compared to their current and expected growth rates.
So while I do not think the AI sector itself is in bubble territory, I think prices in one specific area of the technology sector have flown too close to the sun after a recent period of abnormally high returns. I’m talking about quantum computing.
In particular, I see three specific quantum computing stocks that smart investors should avoid now.
Image source: Getty Images.
The biggest gainers in the quantum computing space over the past few years have been pure plays such as IonQ (NYSE: IONQ), Rigetti Computing (NASDAQ: RGTI), and D-Wave Quantum (NYSE: QBTS). Since the dawn of the AI revolution, each of them has skyrocketed by more than 1,000%.
IONQ data by YCharts.
As the chart above illustrates, the majority of these gains have taken place throughout 2025. So, what happened this year?
The answer is… nothing. None of the quantum computing pure plays have achieved meaningful technological breakthroughs, nor…
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