Quantum Stocks Take a Hit, Palantir's Pullback, California Wildfires 01/08/25

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David Faber (0:46)

Market insight and analysis. You're listening to the opening bell of CNBC Squawk on the Street.

Carl Quintanilla (0:58)

Good Wednesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Pretty steady pre-open ahead of tomorrow's holiday for former President Carter's state funeral. Yield's definitely in focus. 10-year hits 473 That's close to a one-year high, although Fed Governor Waller does see more cuts this year. Our roadmap begins with unprecedented wildfires spreading uncontrolled in California, forcing tens of thousands to evacuate. We'll bring you the latest live from the ground in LA.

David Faber (1:27)

Plus, as the bubble burst, we're talking about that record run up in quantum computing-related stocks. They are now plunging this after Nvidia's CEO said useful quantum computers could be decades away. And of course, we're keeping a close eye on tech. Struggling to rebound from yesterday's sell-off, Palantir. That was one of the biggest SMB gainers last year. It's down for a third straight day, and AMD is sinking this morning, this after a downgrade over HSBC.

Carl Quintanilla (1:56)

Let's begin with this reversal of fortune for those high-flying quantum computing stocks. They are taking a hit in reaction to this comment from Nvidia's Jensen Huang yesterday at CES.

Jensen Huang (2:07)

If you kind of said 15 years for very useful quantum computers, that would probably be on the early side. If you said 30 is probably on the late side, but if you picked 20, I think a whole bunch of us would believe it. But what we're interested in is we want to help the industry get there as fast as possible.

Carl Quintanilla (2:28)

Some discussion this morning, Jim, about whether we really felt this was on the come in the near term or not.

Jim Cramer (2:34)

Well, it's Collette Crest, by the way, the fabulous CFO who's next to him. I want to point that out because the tag team of them represents tremendous authority. So, the quote previous to that was brilliant in Lightning 2, where he just says, listen, this only works for small form factor and it's used microwave. The large form factor, which by the way, is automatic driving in robots, it doesn't work. So, not only is it later, but it's not useful. And he also said that we work with a CPU, not a GPU, that would be like an Intel engine, and it's much too slow. So, what you have is a stock like Righetti. You'll see that under the crawl, just this very moment. RGTI. Now, this is a $2 stock from a few months ago, and they did a gigantic 50 million share offering in $2.11. Really, basically, because they needed the money. They had flat revenues for a long time. I don't think people are looking at the things they're buying. QUBT, $400,000 in revenues, very big losses. A QTUMETF that has almost no quantum computing, a thing that's been bit up. There really are, David. I'm not saying that these are necessarily fraudulent because Willow, which is a project of Google, is pretty good. And Amazon was working on a program to help quantum developers. But it's frankly, I'm going to use the word chimerical, in the sense that these companies, none of these companies have much in terms of revenues except for IONQ. But they're all losing a lot of money. And it was the type of thing you see at the beginning of the year.

We're also seeing it in nuclear, another area that's chimerical. And I think that it has to be washed out before we can go higher.

David Faber (4:10)

Well, it's not as though we didn't point out any number of times as these stocks were making their moves up about the quality of the companies themselves. I think we made reference, I remember having made reference to the late mid-90s when refrigeration companies, I couldn't remember the name of it, became internet companies, so to speak, and the enthusiasm with which they were briefly greeted. Not to say that that announcement from Google only a few weeks ago about the Willow chip and what it was able to accomplish isn't something that is worth paying attention to, but we pointed out many times, it could be many years, but of course when you hear about it from probably the single greatest authority there is at this point in terms of the future of computing, then you believe it and we'll see. Google stock, by the way, also moved up. I didn't believe it at the time, but too many people said that was the reason on the advancement that they made in quantum.