What’s still unproven, wildly unprofitable, and still gathering the attention of speculative investors? No, it’s not AI — it’s the thing that speculative investors think could be the next next big thing.

Even NvidiaNVDA

CEO Jensen Huang, who warned in January that the tech was ‘decades’ off, is coming around, saying that it’s “reaching an inflection point.”

Strong words coming from the AI Kingpin, who’s talking about quantum computing — a promising new kind of computing hardware that could change the world. And investors are desperate to speculate on its arrival.

Firms like Quantum Computing Inc.QUBT

, D-Wave QuantumQBTS

, Rigetti ComputingRGTI

, and IonQIONQ

have exploded in popularity, with shares soaring 2,734%, 1,319%, 1,082%, and 402% over the past year.

That’s turned these penny stocks into billion-dollar enterprises. But just because they’ve hit the lottery once doesn’t mean they will again — and investors might not either.

Quantum caution: Perhaps the valuations of these quantum firms represent their possible world-changing applications, but after the four businesses reported just $24M in revenue in Q1 2025, it’s beginning to feel like a stretch. Instead, it seems the companies are reactive to news about quantum developments rather than delivering breakthroughs on their own. And with competitive pressures rising, there’s the risk that these entities could be crushed — echoing January when critical commentary by AI leaders declared the tech immature and prompted massive declines in their stocks. But even if they don’t have time on their side, they do have one thing — equity offerings.

• Taking advantage of their sky-high valuations, all four organizations have sold new shares — they’ve raised a combined $1.4B, mostly in the last few months.
• This is propping up record cash positions atIONQ
  ,RGTI
  , andQBTS
  , which have $697M, $575M, and $304M of cash on hand — multiples more than their lifetime revenue.

David vs. Goliath in the Quantum Realm

While the companies insist the money will support R&D, it remains to be seen if record cash positions will equip these small, specialized firms with firepower to take on larger, more resourced tech giants. Maybe the funds are just the bare minimum they need to stay relevant with a horde of new forays.

• In recent months, tech leaders like GoogleGOOGL
  , AmazonAMZN
  , and MicrosoftMSFT
  have pushed new entries in the quantum field — Willow, Ocelot, and Majorana 1.
• Various firms have taken different approaches to the quantum challenge; with powerhouses like Google and IBMIBM
  taking aim at pure qubit count, while Amazon and Microsoft orient themselves towards stability.

Beware of ATM: Equity raises are often tactically deployed by operators to raise money on stock pops and good news, often resulting in stock declines — which tend to hurt investors. That might be reason enough to steer clear of these names, which aren’t strangers to raising money. Instead, investors might find solace in more diversified tech-focused ETFs or tech players with favorable valuations.