Amid the artificial intelligence (AI) frenzy sweeping the markets, a portfolio adjustment by billionaire Ken Griffin, founder of Citadel Advisors, has thrust another cutting-edge tech sector—quantum computing—into the spotlight. In the third quarter of 2025, Citadel Advisors, under his leadership, nearly exited its position in the high-flying AI storage chip stock Sandisk (SNDK) and instead purchased shares in quantum computing company D-Wave Quantum (QBTS).
The rise of Sandisk epitomizes the explosive demand for AI infrastructure. As a key supplier of NAND flash memory storage solutions, driven by data center and edge computing needs, its stock price has soared more than tenfold since its spin-off from Western Digital in early 2025. Currently, a severe shortage of memory chips and Wall Street’s aggressive earnings growth projections for the coming years have jointly propelled the stock higher.
However, Griffin’s decision to sell heavily in Q3 stems from a deep understanding of the semiconductor sector’s pronounced cyclicality. The memory chip industry is notorious for its extreme cyclical volatility. The current supply tightness and super-high pricing inherently sow the seeds for future oversupply risks. Once the supply-demand dynamic reverses, Sandisk would quickly lose pricing power, putting immense pressure on its sky-high price-to-earnings (P/E) ratio of 170. Griffin’s sell-off is essentially a risk-aversion move against a potential upcoming industry cycle peak, showcasing the discipline of a top-tier hedge fund in “leaving the party early while it’s still in full swing.”
In stark contrast to selling a leader in a mature sector is the purchase of D-Wave Quantum, a company still in the early stages of commercialization. D-Wave is a pioneer in commercializing quantum computing, focusing on quantum annealing technology for optimization problems, and has established first-mover advantage and early customer relationships in this niche. Its stock price has skyrocketed over 1900% since early 2023 and led the quantum computing sector in 2025.
Analysis suggests Griffin’s decision to establish a small position in this stock may not be based on a firm conviction in D-Wave’s long-term winning status, but rather resembles a high-risk “momentum trade.” Quantum computing is widely recognized as a transformative next-generation technology, but widespread commercial adoption is still years, if not a decade or more, away. The current market fervor for the quantum concept bears similarities to the internet bubble of the late 1990s, with investors paying a massive premium for a distant future narrative. D-Wave’s current price-to-sales (P/S) ratio of 347 has entered typical “bubble” valuation territory.
Looking ahead to 2026, D-Wave faces several core challenges:
Extremely High Valuation Correction Risk: The current valuation has priced in years of high-growth expectations. If market risk appetite shifts or the hype around quantum computing subsides, the stock price could experience a sharp correction. Some market analysis even warns that its valuation pattern resembles darlings of the internet bubble era, posing a risk of falling into “penny stock” territory.
A Long Wait for Commercialization: Although D-Wave’s technology has demonstrated advantages in specific optimization problems, it remains far from being a universally adopted tool by enterprises. The entire quantum computing market is projected to reach only about $4 billion by 2030, still minuscule compared to the current multi-hundred-billion-dollar AI market. The market demands patience, a commodity often in short supply among investors.
Uncertainty in Competition and Technological Paths: The quantum computing field features diverse technological paths (e.g., superconducting, ion trap). D-Wave’s focus on quantum annealing is not the only path to achieving universal quantum computing. If other technological routes achieve breakthroughs faster in the future, the company’s first-mover advantage could be eroded.
Griffin’s trade provides investors with clear signals on two levels: First, even for red-hot AI supply chain stars, one must remain vigilant about their inherent cyclical risks. Second, for frontier disruptive technologies like quantum computing, market pricing in the early stages is often filled with irrational enthusiasm. Regarding D-Wave Quantum, the stock represents the immense potential of future technology, but its price in the short term acts more like a mirror reflecting extreme market sentiment and liquidity.
Investors seeking to participate should clearly recognize that this is a high-risk gamble racing against valuation bubbles and a prolonged R&D cycle. Strict position control is essential to avoid mistaking conceptual hype for certain growth investing. Griffin’s small position perhaps precisely reflects this cautious approach.
