Cooling inflation has eased some pressure on financial markets over the past month, but it has done little to revive investor appetite for speculative growth stocks.
U.S. consumer inflation slowed to 3.5% in June from 4.2% in May, while core inflation held at 2.6%, suggesting underlying price pressures are moderating (data by the U.S. Bureau of Labor Statistics, July 14, 2026). However, the Federal Reserve continues to maintain a cautious stance, keeping the federal funds rate at 3.50%-3.75% and reiterating that future policy decisions will remain data dependent as inflation still exceeds its 2% target (June 2026 release by the Fed). Meanwhile, a resilient labor market, healthy wage growth and lingering geopolitical risks have affirmed expectations that interest rates could stay elevated for longer.
Against this backdrop, investors have rotated away from high-beta technology stocks, triggering a sharp correction across the pure-play quantum computing space. Over the past 30 days, IonQ IONQ has plunged 35.7%, followed by Rigetti Computing RGTI, down 29%, and D-Wave Quantum QBTS, down 27.8%, significantly underperforming the Zacks Computer & Technology sector's 4.5% decline.
30-Day Quantum Computing Stock Performances
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While the sector remains volatile, the recent correction appears to have created a more attractive entry point, particularly for another pureplay, Quantum Computing Inc. QUBT or QCi, whose improving commercial momentum positions it well for a potential sentiment-driven rebound.
Why the Recent Sell-Off May Be a Buying Opportunity
While higher interest rates have compressed valuations across emerging technology companies, the quantum computing industry's long-term outlook continues to strengthen. The Trump administration's June executive orders on quantum innovation are aimed at accelerating commercialization through an updated National Quantum Strategy, expanded quantum networking infrastructure, the Department of Energy's Quantum Computer for Application Development and Discovery Science (QC-ADDS) initiative and faster adoption of post-quantum cybersecurity. Coupled with increasing enterprise adoption and steady technological progress, these initiatives provide solid long-term support for the sector despite near-term macroeconomic challenges.
Valuation Reset Improves the Risk-Reward Profile
Exiting the quantum computing space entirely may not be the most prudent investment decision. Although these companies remain highly sensitive to changes in interest rates and investor risk appetite, the recent valuation reset has created more attractive entry points. With this valuation reset, a single quarter of stronger-than-expected commercial execution or earnings could rapidly improve investor sentiment across the sector.
Our Pick
QUBT: QCi appears well-positioned for a rebound, backed by improving fundamentals and a stronger earnings outlook. The company delivered first-quarter 2026 revenues of $3.7 million, compared with $0.1 million in the year-ago quarter, driven by contributions from its recently acquired businesses and growing demand for its integrated photonics portfolio.
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The upcoming second-quarter report is expected to show further evidence of revenue acceleration, improving operating leverage and updates on customer engagements for its quantum photonic chips, LiDAR and quantum cybersecurity solutions. Beyond Q2, continued integration of Luminar Semiconductor and NuCrypt, higher utilization of its Arizona chip foundry, expanding government and commercial contracts, and improving revenue visibility through the remainder of 2026 could support further estimate revisions and multiple expansion.
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Reflecting this improving outlook, QUBT currently carries a Zacks Rank #2 (Buy). For 2026, the Zacks Consensus Estimate for revenues is pegged at $21.7 million compared with the year-ago reported revenues of $ 0.7 million. Based on short-term price targets offered by six analysts, the average price target of $18.33 for QCi represents an increase of 120.3% from the last closing price. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
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Quantum Computing Inc. (QUBT): Free Stock Analysis Report
IonQ, Inc. (IONQ): Free Stock Analysis Report
Rigetti Computing, Inc. (RGTI): Free Stock Analysis Report
D-Wave Quantum Inc. (QBTS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).