Investment avenues have proven to be quite challenging this year. Observations gleaned at the market close on June 5 detail that both the S&P 500 and Nasdaq Composite indexes have seen neutral performance on an annual basis. This has created a rather complex environment for gaining returns in the stock market. However, there have been opportune moments when higher-than-average market volatility has benefited investors. At this point, you might have encountered the ‘TACO’ trade term in financial domains. Let’s delve deeper into unraveling this terminology and its implications. The narrative around artificial intelligence (AI) is becoming increasingly exciting, particularly in the realm of quantum computing. Is it feasible to leverage quantum computing stocks for an effective TACO trade? Here’s a deeper exploration.
What exactly is implied by the TACO trade? While the S&P 500 and Nasdaq have maintained a steady status quo for the year, there have been significant ups and downs across both indexes in 2025. However, these fluctuations have been notoriously short-lived. The ‘TACO’ trade is an interestingly coined term, an acronym for ‘Trump always chickens out.’ It’s a phenomenon whereby whenever there’s a shift in the President’s stern stance on tariff strategies, market dynamics respond with a substantial fall. Yet, the moment the tariff-related discussions are defused, a recovery in the markets is witnessed. Therefore, the TACO trade essentially signifies a new strategy of capitalizing on market downturns when stock prices plummet significantly.
Is it prudent to consider quantum computing stocks for buying right now? Presently, IonQ (NYSE: IONQ) and Rigetti Computing (NASDAQ: RGTI) are among the most sought-after quantum computing stocks. The precedent year, 2024, witnessed IonQ shares skyrocketing by 237%, while Rigetti stocks augmented a staggering 1,450% — outperforming the broader market significantly. However, the performance of these stocks in the current year tells a different story. As observed at market closure on June 5, both IonQ and Rigetti Computing shares have taken a hit, falling by 12% and 28% respectively.
Considering these drops, one wonders if it’s an opportune time to invest in quantum computing stocks. Astute investors understand the importance of factoring in valuation in this decision-making process. When assessed differently, IonQ and Rigetti Computing have collectively generated a revenue of about $50 million over the preceding year, all the while registering a combined net loss of $460 million. The miniscule sales and substantial losses make it difficult to defend the valuation multiples.
Despite experiencing a remarkable surge in their respective share prices, Rigetti and IonQ appear to be buoyed by the optimistic narrative surrounding quantum computing. Consequently, their market performance, rather than being tethered to solid business indicators, seems to be based on a general optimistic outlook on the future potential of quantum computing. It is prudent to keep a broader perspective in view when considering such investments.
The central takeaway from this discussion is that despite IonQ and Rigetti shares falling this year, their current valuations present a clear indication that these companies do not present an enticing ‘buy the dip’ opportunity. Even with their mediocre performance this year, they still appear overpriced. Therefore, I wouldn’t recommend diving into any further sell-offs in these quantum computing stocks as the TACO trade narrative evolves.
Given current scenarios, there’s a reasonable likelihood that both IonQ and Rigetti may experience further valuation contraction and a possible continuation of their downward trend in share prices. Thus, prudent investment requires careful review of the strategies and situationaled judgments in complex volatile scenarios, such as the TACO trade, and the enigmatic but promising domain of quantum computing.