Trump Announced A $2 Billion Investment In This Quantum Stock!
In a Nutshell
QBTS surged 23% after news of a potential $2 billion U.S. government investment in quantum computing companies under the Trump administration. Despite the hype and historical precedent with Intel, QBTS remains fundamentally weak with $12 million revenue against a $368 million loss and repeated boom-bust cycles. The speaker added the stock to a watchlist for potential shorting if momentum fades, while advising caution in the consolidating NASDAQ market.
These notes were generated by AI and may contain inaccuracies.
The NASDAQ market is trading slightly in the red, driven largely by Nvidia. Nvidia reported better than expected earnings and performed strongly, but the stock may be experiencing a buy the rumor, sell the news event. Some investors appear to be taking profits or shifting capital from the AI leader into more speculative assets such as SanDisk, Western Digital, and Micron. Nvidia's influence is contributing to the broader market retracement, with the NASDAQ showing consolidation. A break below support at 706 for QQQ could lead to a retest of previous lows around 700.
QBTS is up 23% on the day. The move follows news that the company is one of several receiving up to a $2 billion investment from the US government under the Trump administration. The investment takes the form of equity stakes across nine quantum computing companies, including a new IBM venture. The broader initiative aims to shore up the domestic supply chain and counter China in critical sectors. This is presented as similar to the previous equity stake taken in Intel.
QBTS is described as a low-quality company with significant overvaluation. Analyst targets indicate 56% downside potential. The company reports $12 million in revenue while posting a $368 million loss. Net income shows a loss of $368 million with a negative P/E ratio of 19.4. Revenue growth is inconsistent and erratic. The speaker notes that these fundamental weaknesses would not be apparent from the chart alone.
The Intel investment by the Trump administration is cited as a precedent. Intel was not a thriving company at the time but received government support and partnerships, after which price targets followed. Intel has since moved from lows near $20 to highs of $132 and now trades around $100 despite a down day in the current session. The speaker suggests that similar government involvement with QBTS could shift its trajectory if partnerships are established.
QBTS has shown a repeated pattern of rallying and then crashing, with previous rallies followed by 50% to 60% declines. The current move is viewed as potentially short-lived if it follows this historical behavior. The stock is characterized as overhyped, highly speculative, and fundamentally weak, having paid the price for these issues in prior cycles.
QBTS has been added to the speaker's watchlist to monitor whether the hype sustains or fades. A 22% gain has already occurred on the news. If momentum fades, a potential short opportunity may develop. This approach is noted as relevant for the LPP team. The speaker emphasizes the importance of understanding companies fundamentally rather than relying solely on charts.
The NASDAQ has shown neither clear bullish nor bearish direction since the open and remains in consolidation. When direction is uncertain, the recommendation is to either reduce position size or stay in cash. The advice given is that when in doubt, it is better to cash out than to take unnecessary risk. This guidance is directed particularly at beginners.
Live trading sessions occur every morning. Links for Investing Pro (55% off, less than $9 per month) and live trading access are provided in the video description. The current promotion for Investing Pro ends within one hour of the video upload. The speaker closes by wishing viewers a green end to the year.
Keep Ricky Gutierrez in your library
Save the videos and channels worth coming back to, and find them again in one place.
