2 Quantum Stocks to Avoid as 2026 Begins

Rigetti generated $5.2 million of revenue across the first three quarters of 2025, a 39% decline year-over-year, and booked two October 2025 system sales totaling $5.7 million that will not be recognized until H1 2026—creating a likely Q4 2025 revenue shortfall versus analyst expectations of $7.6 million and an EPS miss versus a projected $0.03 loss-per-share. D‑Wave posted under $22 million through the first three quarters of 2025 and likely finished the year below $26 million with no profit, yet trades at an approximately $9.7 billion market capitalization while analysts do not expect profitability before 2030. Both stories flag weak fundamentals and difficult near-term earnings visibility, supporting a cautious/avoid stance for these small-cap quantum names and a potential material negative re-rating if Q4 bookings and recognition timing disappoint.

Analysis

Market structure: Small-cap quantum hardware names (Rigetti RGTI, D‑Wave QBTS) are the clear losers as valuations (QBTS ≈ $9.7B vs <$26M revenue in 2025, ~300–400x revenue) are disconnected from fundamentals; winners are cloud incumbents (AWS, MSFT, GOOGL) and semiconductors (NVDA) that provide scalable quantum/AI compute and can monetize real demand. The supply/demand picture shows strong headline demand/bookings but lumpy revenue recognition: two Rigetti system sales announced Oct 2025 likely push revenue into H1 2026, creating a one-time timing shock rather than underlying growth. Cross‑asset: a tech unwind would push Treasury yields down (flight to safety), VIX up 30–70% near-term, USD slight bid; commodities unaffected materially.

Risk assessment: Immediate tail risk is an earnings miss at Rigetti in early March 2026 (analyst revenue consensus $7.6M) that could trigger a 30–60% repricing; short‑term (weeks–months) risks include dilution from convertible raises and a failed revenue recognition audit; long‑term risk for QBTS is inability to reach profitability before 2030 as consensus implies. Hidden dependencies include revenue recognition policy, customer acceptance/installation timelines, and small float-induced volatility; catalysts that can reverse trends include H1 2026 booking recognition, large cloud partnership announcements, or faster-than-expected margin improvement.

Trade implications: Tactical short bias: size constrained shorts in RGTI/QBTS ahead of Rigetti’s March 2026 Q4 print and D‑Wave’s next quarter, funded by longs in NVDA or SOXX to capture secular AI/compute rotation. Options: prefer limited‑cost structures—buy 12–16 week ATM put or 3–6 month 30/15 delta put spreads on RGTI/QBTS to limit premium and manage gamma. Allocate macro hedge (0.5% portfolio) to VIX futures or 1‑month SPX puts into earnings season; rotate proceeds into semis/cloud if market dislocations widen.

Key Decisions for Investors

• Establish a 1–2% portfolio short exposure to Rigetti (RGTI) via buying 12–16 week ATM puts or a 30/15‑delta put spread sized to limit premium; enter before Rigetti's Q4 2025 report (expected early March 2026); target a 30–60% downside, set a stop-loss at 30% adverse move in option price or exit if company affirms >$5M Q4 revenue on filing.
• Initiate a 1% portfolio bearish position in D‑Wave (QBTS) using a 3–6 month put spread (buy 30‑delta, sell 15‑delta) to capture downside while capping cost; unwind after H1 2026 revenue recognition or if management provides credible path to profitability before 2030.
• Execute a pair trade: long NVDA or SOXX (1–2% portfolio) and short equal notional QBTS+RGTI (combined 1–2%) to express long exposure to real compute secular winners while shorting speculative quantum hardware; rebalance after March–June 2026 earnings/bookings.
• Buy a 0.5% portfolio hedge in VIX futures or 1‑month ATM SPX puts into the March 2026 earnings window to protect against a tech‑led volatility spike; lift hedge once volatility falls below 20% or after the companies report and immediate repricing occurs.
• Monitor these specific triggers within 7–14 days post‑earnings: Rigetti’s revenue recognition footnote (must show H1 2026 booking recognition), any convertible debt/share issuance announcements, and analyst estimate downgrades >15%—reduce shorts if management proves recurring ARR >$20M or discloses multi‑year service contracts.