Tech industry giants Alphabet (GOOGL), Microsoft (MSFT) and Amazon.com (AMZN) are pressuring cash-strapped quantum computing startups, says an economist. Quantum computing stocks continue to struggle in 2025, with earnings from  D-Wave Quantum (QBTS) due on March 13.

"Tech giants Amazon, Google, and Microsoft all have announced breakthroughs they've made in quantum computing," said economist Ed  Yardeni in a report on Thursday. "Conversely, small startup quantum computing companies have watched their stocks tumble, as they rack up losses. In this David versus Goliath tale, it looks like Goliath may win."

As of Wednesday's market close, Quantum Computing (QUBT) was down 68% in 2025, Rigetti Computing (RGTI) had retreated 46%, IonQ (IONQ) had tumbled 45% and D-Wave had shed 33%.

Quantum stocks rallied in December after Alphabet's Google announced the "Willow" quantum computing chip. Microsoft and Amazon also recently announced new quantum advances.

Yardeni noted that quantum computing startups last year also had hoped for a boost from President Donald Trump.

"The industry was hopeful that the Trump administration would provide support because during Trump's first term he signed the 2018 National Quantum Initiative Act, which bolstered government research in the area," he said.

Quantum Computing Stocks: Nvidia Conference

In early January, comments by Nvidia (NVDA) Chief Executive Jensen Huang pressured quantum computing stocks. Huang said that the technology won't be "very useful" for 15 to 30 years.

Nvidia will host a "Quantum Day" on March 20 as part of its GTC conference. Also, Nvidia is working with Israeli startup Quantum Machines, which in February raised $170 million.

Meanwhile, quantum computing startups need capital to continue operations, added Yardeni.

"IonQ, for example, doesn't expect to be profitable until 2030," Yardeni said. "And D-Wave recently sold $150 million of stock to boost its cash balance to around $320 million."

Rigetti Reports Q4 Loss

Rigetti Computing reported a wider-than-expected Q4 loss late Wednesday, with revenue down 33% to $2.27 million. Rigetti stock plunged early Thursday, with IonQ and D-Wave also falling.

Taiwan-based Quanta Computer in February agreed to invest $35 million in Rigetti through a stock purchase.

"Although Rigetti has maintained one of the most conservative postures on the timing of quantum advantage, we think the (Quanta) deal represents an undeniable validation in the company's architecture and modular approach," said Benchmark Equity analyst David Williams in a report on its fourth quarter earnings.

Quantum computing works on a subatomic level and uses exotic technologies, like supercold superconductor chips. Further, Quantum computing's ultimate benefit is that it aims to solve problems too complex for today's classical computers.

Quantum computers use quantum bits known as qubits to encode information. Quantum computers generate and control qubits to perform computations.

As it stands, the most advanced quantum machines still only use hundreds of qubits, and scaling up the technology will be key. Qubits are prone to errors, which are compounded when scaled.

Chinese Competition Growing

Aside from tech giants Google, Microsoft, Amazon and IBM (IBM), startups also face growing competition from China, Yardeni said.

"Chinese scientists at the University of Science and Technology recently introduced a quantum computer prototype called Zuchongzhi 3.0, with 105 qubits," Yardeni said. "The scientists claim that the quantum computer can process quantum random circuit sampling tasks one million times faster than Google's processor. This follows news of a Chinese prototype quantum computer named 'Wukong,' which has 72 qubits and can be accessed in the cloud."

Meanwhile, IonQ has been making acquisitions.

In late February, IonQ acquired a majority stake in Geneva-based quantum networking provider ID Quantique. In November, IonQ bought quantum networking startup Qubitekk. In 2023, the company acquired Entangled Networks.

Further, IonQ recently posted a fourth quarter loss of 93 cents a share, widening from 20 cents per share a year earlier. Revenue rose 92% to $11.7 million.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.

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