The AI infrastructure trade faced significant pressure in July as investors questioned whether hyperscalers can maintain high capital spending while delivering attractive returns.
Those concerns deepened after Alphabet (GOOGL) raised its 2026 capital expenditure guidance to $195-$205 billion, up from a prior range of $180-$190 billion.
Reports that NVIDIA (NVDA) is considering financing guarantees for OpenAI’s massive data center project further reinforced fears about the growing capital intensity of next-generation AI computing.
Competition from Chinese AI model developers and semiconductor companies added to the pressure, fueling concerns that returns on AI infrastructure investments could moderate over time.
The combination triggered a broad sell-off across AI infrastructure and semiconductor stocks on July 28 as investors rotated out of richly valued AI names.
The risk-off sentiment spilled into quantum computing, with shares of Rigetti Computing (RGTI), IonQ (IONQ), D-Wave Quantum (QBTS) and Quantum Computing Inc. all retreating sharply month to date.
Despite the sector-wide pullback, quantum computing’s underlying business momentum remains largely intact, with leading companies continuing to expand commercial bookings and secure government and defense contracts.
The recent decline appears to reflect broader market sentiment rather than any deterioration in quantum-specific fundamentals, making it a potential entry point for long-term investors.
D-Wave Quantum (QBTS) reported strong first-quarter bookings of $33.4 million and remaining performance obligations of $42.4 million, ending the quarter with a cash position of $588.4 million.
Following its acquisition of Quantum Circuits, D-Wave expanded beyond quantum annealing into gate-model quantum computing, strengthening its competitive positioning ahead of second-quarter earnings.
QBTS carries a Zacks Rank #2 (Buy) rating and is projected to report 2026 earnings growth of 75.7% on revenue growth of 63.3%, offering a compelling long-term opportunity at current prices.
Rigetti Computing (RGTI) delivered nearly 199% year-over-year revenue growth in the first quarter while maintaining approximately $569 million in cash, cash equivalents and investments.
Rigetti continues to advance its superconducting gate-model quantum roadmap, including the planned launch of its 108-qubit Cepheus-1 system, while expanding collaborations across government, research and commercial customers.
RGTI carries a Zacks Rank #3 (Hold) rating and is projected to deliver 2026 earnings growth of 71.9% on revenue growth of 257.3%, offering an attractive risk-reward profile following the recent sector-wide pullback.
