Quantum Computing Inc's Impending Collapse: A House of Cards Built on FOMO and Fragile IP

The quantum computing sector has become a battleground for speculative hype, but one player—Quantum Computing Inc (QUBT)—is now at the edge of a cliff. Its stock has surged 1,017% over the past year on retail FOMO, but beneath the frenzy lies a company riddled with technical incompetence, institutional abandonment, and governance flaws. Contrast this with peers like Rigetti (RGTI) and Google (GOOG), which are making tangible strides, and QUBT's impending collapse becomes a mathematical certainty. Let's dissect why this stock is primed for a 90%+ implosion.

Technical Flaws: A Hollow R&D Machine

QUBT's core problem starts with its R&D team—or rather, the lack of transparency around it. Unlike Rigetti, which has disclosed clear milestones (e.g., the 84-qubit Ankaa-3 system with 99.5% gate fidelity), QUBT's Q2 2025 R&D team composition remains a black box. The company's earnings reports mention $8.3M in R&D expenses but provide no details on personnel, projects, or departures. This opacity suggests either a weak team or poor management prioritization.

Meanwhile, its flagship technology—lithium niobate (TFLN) photonic chips—faces structural hurdles. While photonic qubits avoid superconducting systems' extreme cooling needs, they lag in scalability. QUBT's Dirac-3 system claims up to 11,000 qubits for binary problems, but these are “entropic qubits” with unclear practical applications. In contrast, Rigetti's modular superconducting qubits (targeting 100+ qubits by 2025) offer proven error-correction paths.

Worse, QUBT's IP portfolio is a liability. Its sole standout patent—a quantum authentication method—won an award but lacks defensive depth. Google and IBM hold 1,500+ and 2,500+ quantum patents, respectively, while QUBT's total remains undisclosed. Its photonic modality faces patent prosecution challenges, and its “zero-knowledge proof” system, while novel, is niche. Institutional investors avoid companies reliant on single-technology gambles.

Fundamental Meltdown: Cash Burn and Retail-Driven Illusions

QUBT's financials are a disaster. Despite a $190M private placement in late 2024, its cash reserves of $3.1M (as of Q3 2024) are evaporating. Analysts project a $0.21 EPS net loss in FY2025, with revenue expected to grow only 200% to $1.5M—a trivial sum for a company valued at $1.3B. Compare this to Rigetti, which projects $15.57M in revenue (up 41.5%) and a narrower net loss of $0.28.

The disconnect is stark: QUBT's valuation is 866x projected revenue, versus Rigetti's 166x. Even in the manic quantum sector, this is delusional. Institutional investors have noticed: QUBT's shares fell 46% in a month after Jensen Huang (Nvidia's CEO) declared practical quantum computing is 15–20 years away—a body blow to QUBT's “near-term supremacy” narrative.

Governance and Retail FOMO: A Toxic Combination

QUBT's governance is a red flag. The CEO transition—Dr. William McGann's retirement replaced by Dr. Yuping Huang—lacks public context, raising questions about succession planning. Meanwhile, the stock's 1,017% 52-week surge is fueled by retail FOMO, not fundamentals. Short interest is low, but a single negative catalyst (e.g., a delayed chip foundry opening or patent rejection) could trigger a collapse.

Historical backtesting of this strategy reveals significant underperformance: a buy-and-hold approach on earnings announcement dates from 2020 to 2025 resulted in a compounded annual growth rate (CAGR) of -11.44%, with a maximum drawdown of -24.72%—evidence that QUBT's price movements are driven by speculative whims rather than fundamentals.

Institutional money is fleeing. While Rigetti secured a $100M equity infusion in late 2024, QUBT's $190M raise in early 2025 likely drew from speculative retail accounts. There's no “smart money” support here—only a house of cards.

Contrast with Peers: Rigetti and Google's Real Progress

Rigetti and Google are executing while QUBT spins its wheels:
- Rigetti: Its Ankaa-3 system (99.5% gate fidelity) is accessible via cloud platforms (Amazon Braket, Azure). By mid-2025, it aims to launch a 36-qubit modular system, scaling toward 100+ qubits by year-end.
- Google: Its Willow chip demonstrated quantum supremacy, solving a problem in 5 minutes that would take a supercomputer 10 septillion years. This isn't hype—it's a $200B market validation.

QUBT's only “wins” are niche partnerships (e.g., a South Korean entangled photon source order) and a foundry in Tempe. But without scalable IP or institutional backing, these are drops in a desert.

Investment Conclusion: Sell, or Avoid at All Costs

QUBT is a textbook short: overvalued, underperforming, and dependent on retail FOMO. With a $1.3B market cap, $3.1M in cash, and Jensen Huang's timeline underscoring its irrelevance, this stock is a 90%+ downside risk.

Actionable advice:
- Short QUBT at current levels.
- Avoid entirely if you can't short—its fundamentals and governance make it a “buy the rumor, sell the news” trap.
- Buy RGTI or GOOG for exposure to quantum progress with real metrics.

The writing is on the wall: QUBT's collapse isn't a question of if, but when.