Market Forecast 2025: Why I’m Watching Quantum Computing

As we enter 2025, the sector making the most headlines has been quantum computing. Driven by thousand-percent gainers like Quantum Computing Inc (NASDAQ: QUBT), D-Wave Quantum Inc (NYSE: QBTS), and Rigetti Computing Inc (NASDAQ: RGTI), quantum computing is now rivaling artificial intelligence (AI) as the market’s hottest sector. Combine that with a return to the kind of volatility we last saw in 2022, and it’s clear that the coming months could present both opportunities and challenges that we haven’t seen in a while.

Read on to hear my 2025 market forecast!

Quantum Computing Stocks: The Next Big Thing?

Quantum computing stocks have been on an unbelievable hot streak in 2024, with companies like Quantum Computing Inc (NASDAQ: QUBT), D-Wave Quantum Inc (NYSE: QBTS), and Rigetti Computing Inc (NASDAQ: RGTI) seeing gains of 1,000% or more in just two months.

These aren’t the typical one-and-done penny stock spikes—I actually like their charts. They’ve spiked then held their gains, consolidating before making their next moves.

Here are the things I’m watching in 2025:

1. Market Caps Are Surging: Many quantum players have jumped from market caps of $300 million to $1.5 billion or more in weeks. While still small compared to AI giants, these valuations suggest growing confidence in the sector.
2. Solid Chart Patterns: Unlike some fleeting spikers, quantum stocks are forming sustainable trends, signaling long-term interest from traders and institutions alike.
3. Big Announcements: IBM is building its largest quantum computer yet, set to debut in 2025. Moves like this legitimize the industry and drive interest across the board.

How to Trade Quantum Computing Stocks

The sector’s volatility presents opportunities for disciplined traders. Many quantum stocks are extended far above key support levels like their 10-day moving averages, making pullbacks prime buying opportunities.

But be cautious—these companies have yet to prove they can consistently generate revenue, let alone profit. Always cut your losses quickly if a trade isn’t going your way.

AI vs. Quantum Computing: A Hot Sector Showdown

While AI has dominated headlines for the last two years, quantum computing is beginning to build its own legacy. However, these two sectors aren’t in direct competition—yet.

• AI Today: Many AI companies are already monetizing their products, generating revenue, and meeting investor expectations. Heavyweights like NVIDIA (NASDAQ: NVDA) continue to deliver blockbuster earnings.
• Quantum Computing’s Future: The technology is still in its infancy, with significant barriers to widespread adoption. High costs, limited practical applications, and long development timelines make it a speculative play for now.

For perspective, a tech giant like Alphabet Inc (NASDAQ: GOOG) estimates it will take a decade to monetize its quantum chips. Yet the market’s enthusiasm is undeniable.

A Return to Volatility

The smooth, steady uptrends of the past two years may be coming to an end. Traders who entered the market recently have been spoiled by predictable patterns and limited downside. That could change as we move into 2025.

Here’s why I think there might be increased volatility in the markets:

1. Political and Economic Noise: With a new administration in Washington, potential regulatory changes, spending initiatives, and trade policies could introduce significant uncertainty.
2. Consumer Debt Concerns: Credit card defaults are at a 14-year high, with $46 billion in debt flagged as potentially defaulting. If consumer spending slows, it could ripple across multiple sectors.
3. Shift in Market Sentiment: The S&P 500 has climbed almost 50% over the past two years, driven by higher valuations rather than earnings growth. If companies can’t deliver the profits to back up these valuations, a correction could follow.

How to Trade Volatility

Be prepared for choppier price action. The days of smooth, low-volatility uptrends may give way to sharper moves, both up and down. For those who thrive in volatile environments, this could be an opportunity to profit from exaggerated price swings.

If you need a refresher, here’s how we approached the last volatile market…

Don’t just aim to navigate these choppy waters – conquer them.

Key Sectors to Watch

While quantum computing is stealing the spotlight, other sectors remain hot and worth tracking:

• AI: Even with quantum’s rise, AI stocks like NVIDIA and smaller players in the space continue to show strength.
• Small Caps: The January effect could lead to a rebound in beaten-down small-cap stocks, providing fertile ground for traders.
• Consumer Tech: Companies like IBM, which is doubling down on quantum, may also see renewed interest as tech innovation accelerates.

Key Stocks to Watch in 2025

My top penny stock picks for 2025 are:

• NASDAQ: SOUN — SoundHound AI Inc — The Record Revenue AI Penny Stock
• NASDAQ: QUBT — Quantum Computing Inc — The Volatility Magnet in Quantum Tech
• NASDAQ: RGTI — Rigetti Computing Inc — A Quantum Stock Defying Expectations

These stocks all had enormous 2024s…

Before you send in your orders, take note: I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. That’s what I’m trying to model here. Pay attention to the work that goes in, not the picks that come out.

Sign up for my NO-COST weekly watchlist to get my latest picks!

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SoundHound AI Inc (NASDAQ: SOUN): The Record Revenue AI Penny Stock

SoundHound AI (SOUN) has cemented its place as a leader in the AI sector, delivering record-breaking growth in 2024 and maintaining momentum as 2025 begins. A pioneer in voice recognition technology, SOUN was one of the first stocks to capitalize on the AI boom triggered by ChatGPT in 2023.

Currently trading above $20, SOUN has smashed through its one-year highs and continues to consolidate at elevated levels.

Key Financial Highlights
SOUN reported strong Q3 financials on November 12, with revenue of $25 million (beating expectations by $2 million) and an EPS beat of $0.01. Backed by major investors like NVIDIA Corporation, SoundHound has emerged as a key player in the AI space.

Why It’s Worth Watching
SOUN’s chart suggests bullish momentum, with strong investor backing and positive financials driving its trajectory. Traders should monitor its consolidation zone for a potential breakout, as the AI sector remains one of the market’s hottest themes.

Quantum Computing Inc (NASDAQ: QUBT): The Volatility Magnet in Quantum Tech

Quantum Computing Inc (QUBT) has quickly become one of the most talked-about stocks in the quantum sector, delivering a stunning 1,800%* spike since November 13. The catalyst? The company announced it secured its first order for its TFLN photonic chip foundry, a significant milestone in its development.

This spike propelled QUBT to new highs in December, making it one of the most volatile and profitable stocks in its niche.

Why Traders Are Watching
The quantum computing sector is exploding, and QUBT’s chart reflects significant interest from traders. While 1,800% gains are remarkable, history shows that stocks in this niche can move even higher. Intraday volatility continues to present opportunities for those looking to capitalize on rapid price swings.

Trading Insight
Keep an eye on volume and technical levels for signs of further movement. This stock is all about timing and disciplined entries.

Rigetti Computing Inc (NASDAQ: RGTI): A Quantum Stock Defying Expectations

Rigetti Computing (RGTI) is another standout in the quantum space, delivering a jaw-dropping 1,100%* spike following a surprise offering announcement. On November 25, the company revealed it raised $100 million by selling 50 million shares to two institutional investors at $2.00 per share.

While offerings typically dilute stock prices, the involvement of institutional investors acted as a bullish catalyst, signaling strong confidence in the company’s prospects.

Why RGTI Matters
RGTI was already gaining momentum before the offering, with a 130%* rise from mid-October to mid-November. The subsequent spike shows just how bullish the quantum sector has become.

Trading Insight
The stock remains elevated, and the quantum computing theme is still hot. With continued intraday volatility, RGTI offers traders opportunities to profit from well-timed entries and exits.

*Past performance does not indicate future results

Final Thoughts on the 2025 Market

2025 is shaping up to be a pivotal year for the markets. Quantum computing’s explosive growth could signal the start of a new tech revolution, but the sector remains speculative and volatile. At the same time, traders should brace for a more unpredictable environment as economic and political factors come into play.

For traders, this is an opportunity to adapt and thrive. Stay disciplined, stick to your setups, and remember—volatility is a trader’s best friend when approached with a clear plan.

What are YOU watching in 2025? Let me know in the comments, I love hearing from my readers!