Quantum Stocks Are in the Wrong Place as Inflation Keeps Grinding Higher
The Fed’s preferred inflation gauge confirmed on May 28 what the trend has been saying for months: core PCE rose to 3.3% year-over-year in April, up from 3.2% in March, up from 3.0% in February. No shock, no surprise — just another step in the wrong direction. For quantum computing stocks, which are speculative, unprofitable, and priced entirely on long-dated future cash flows, this is not a neutral data point. It is another brick in the wall bearing down on their valuations.
Rising Rates Destroy the Math Behind Quantum Stocks
Quantum computing companies do not earn money. QBTS, RGTI, and QUBT are pre-revenue or deeply in the red. Their entire market value rests on what investors believe these businesses might be worth years or decades from now — discounted back to today at whatever rate the market demands.
That discount rate is the kill switch. When rates rise — or when the market raises its expectation of where rates will eventually settle — those future cash flows get marked down harder. The further out the earnings, the bigger the haircut. Quantum computing companies sit at the extreme end of that spectrum. They are among the longest-duration assets in public markets, with no near-term earnings floor to slow the fall.
The April PCE print does not move policy today. What it does is cement the market’s conviction that the Fed under Kevin Warsh is not cutting in 2026 — and increasingly, may be hiking. Markets are now pricing roughly a 50% probability of a rate hike before year-end. That probability is a direct headwind for every speculative long-duration name in the market, quantum stocks foremost among them.
Three Months of Data, One Clear Direction: Down for Quantum
The core PCE trajectory in 2026 is not ambiguous:
- February: 3.0%
- March: 3.2%
- April: 3.3%
Each increment looks modest on its own. Together they spell out the end of any easing narrative. Goldman Sachs expects core to stay near 3% through year-end, with headline inflation holding just below 4%. The “last mile” of disinflation that was nearly complete by late 2025 has reversed. The Fed is not pivoting. It is hardening.
For quantum names, this destroys the one macro tailwind that could have re-rated them higher: a rate-cut cycle. That cycle is off the table. The longer inflation stays elevated, the more deeply it reprices long-duration speculative assets — and quantum stocks have nowhere to hide.
The Bull Case Is Running Out of Road
Earlier in the year, bulls on QBTS, RGTI, and QUBT argued the selloff was an overreaction — that when rate expectations normalized, these stocks would recover sharply. That thesis required the Fed to eventually signal accommodation.
The April PCE data makes that thesis untenable. Core inflation is moving in the wrong direction month after month. Four FOMC members dissented against any easing bias at the April meeting. Fed Governor Waller, one of the most consistently dovish voices on the committee, has now said he would not hesitate to support a rate hike if needed. The macro setup is not normalizing. It is tightening — and tightening is exactly what kills pre-revenue, high-multiple, long-duration stocks.
Short positions in quantum names are not contrarian. They are aligned with the macro regime. That regime just got another month of confirmation.
The Next Catalysts — Both Pointing Lower
The May CPI print in mid-June is the first warning shot. Any acceleration in core services or shelter will signal that May PCE — due late June — is heading above 3.3%. If it prints 3.4% or higher, the probability of a 2026 rate hike crosses majority consensus and becomes the base case. At that point, the repricing of quantum stocks is not a risk — it is a process already underway.
Until the inflation trend breaks, quantum computing stocks are structurally in the wrong place: pre-revenue, longest-duration, and facing a Fed that has moved from neutral to hostile. The April PCE print did not create that problem. It confirmed that the problem is not going away.