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When Nvidia (NVDA) CEO Jensen Huang speaks, the market scrutinizes every word, making every appearance a high-stakes opportunity for a rise or fall for the company, its partners and the industry.
Despite a series of splashy, impressive company announcements, a few lines from Huang stifled technology’s exciting new hope.
Stocks related to quantum computers plunged on Wednesday after Huang’s comments that useful quantum computers are still years away. That’s hardly a new observation. But it moved the markets because of Huang’s large and ever-growing stature on Wall Street and the impatience for innovation that emerged.
When Google (GOOG, GOOGL) unveiled the Willow quantum chip last monthshares in the ecosystem rose, even as market analysts acknowledged that commercial applications are still a long way off.
Compare that to Huang’s comments, and quantum ambitions became a dead weight.
“If you were to say fifteen years for very useful quantum computers, that would probably be early. If you say 30, it’s probably late,” Huang said Wednesday during Nvidia’s analyst day at CES. “If you picked 20, I think a whole bunch of us would believe it.”
Predicting potential revenue streams over the past decades seemed like too much for an industry that measures itself in quarters.
Shares of Rigetti Computing (RGTI), D-Wave Quantum (QBTS) and IonQ (IONQ) all fell more than 40% after Huang’s comments. The quantum names are enjoying a boom, boosted by Google’s announcement in December, as investors scrambled to get as close to the grassroots as possible in a potentially society-changing technology.
But Huang seemed to offer a reality check, or a reason to unload stocks that reached dizzying heights. Over the past year, Rigetti has gained more than 900%, D-Wave Quantum almost 600% and IonQ almost 150%.
However remote these companies’ future applications were, Google offered the market something concrete, and it helped the search giant spark a December rally that brought out related players. Meanwhile, the prediction of a tech executive — albeit perhaps one of the brightest stars in corporate America — sent stocks into the ditch.
The irony of Wall Street pulling away from a supposed paradigm-changing technology is that the market is already deep in the AI transformation. Proponents of quantum computing see advances in this field as a way to surpass conventional data processing, leading to breakthroughs in medicine, energy and cybersecurity. But if investors are already growing impatient with the promises of AI, the rewards of an even more sought-after technology may seem too far away to enjoy.