Apr 17, 2025
Quantum Confusion: The ‘Quantum’ Bubble Driven by Retail Investors
Ryunsu Sung
To err is human. And at times, these all-too-human mistakes create puzzlingly abnormal prices in the stock market. The frenzy over “quantum computing” that peaked in December 2024 is a recent, textbook example of this phenomenon. Back then, enthusiastic retail investors scrambled to buy so‑called “quantum stocks” such as Quantum Corporation, Quantum-SI, QuantumScape, and Quanta Services. The problem was that not a single one of these companies was actually engaged in the quantum computing business. Their names were chosen simply because they sounded cool, not because they accurately described what the companies actually do.
This confusion among investors appears to have directly affected the market prices of at least two stocks. Over the final two months of 2024, Quantum Corporation’s share price soared by a staggering 1,151%, and Quantum-SI likewise posted an eye‑catching 285% gain.
Retail investors blindly bought these stocks for no other reason than that their names contained the word “Quantum.” Only a tiny fraction of them had any real connection to quantum computing. Buying stocks based solely on their names is an extremely foolish way to invest. Yet by late December 2024, retail investors went a step further, rushing in to buy “quantum stocks” at wildly inflated prices that had been driven up by earlier waves of irrational buying.
This is hardly the first time we have seen such behavior. Shiller (2019) recounts an anecdote from the summer of 1929 involving the confusingly named Seaboard Air Lines Railroad Company. He cites Allen (1931) as follows.
"Thousands of people plunged into speculation without the slightest understanding of the nature of the companies they were betting on, and many of them made money. They were like those who bought Seaboard Air Lines, mistaking it for an aviation stock. Grocers, streetcar motormen, plumbers, seamstresses, and speakeasy waiters all joined the market."
The Seaboard Air Lines story is an entertaining anecdote that has been shared with generations of students since the late 1990s. But to be honest, I do not know of any hard evidence that it is actually true. Now, however, I want to use real trading data and prices—clear, objective evidence—to show how investor mistakes can generate abnormal prices and why those prices are not corrected quickly.
Will future historians look back on the 2024 U.S. stock market, compare it to 1929, and interpret the erratic behavior of retail investors as a harbinger of inevitable collapse? I have no way of knowing. But mispriced securities are never a good sign. This is a moment that calls for serious reflection on the health of the market.
Lamont is not trying to debate the future of quantum computing, as I did in my earlier piece “Does Schrödinger’s Cat Really Exist? Quantum Computers and the Multiverse”.
The claim that “quantum computing stocks have strong prospects” and the claim that “stocks with Quantum in their name have strong prospects” are fundamentally different. Neither assertion can really be said to reflect a company’s fundamentals in any meaningful way when making an investment decision, but it is reasonable to say that the latter is far less defensible than the former.
If we look at the data published by Korea Securities Depository and analyze the behavior patterns of Korean retail investors—often dubbed “Korean ants” when they invest overseas—it becomes clear that the investors who buy stocks based on nothing more than the name are, in fact, individuals.
Was this confusion over “quantum” stocks unique to Korean investors? To find out, we examined data from Moomoo, a global brokerage platform with clients in the United States, Australia, Japan, and other countries. We discovered a striking similarity between the stocks most heavily bought on a net basis by Korean retail investors and the so‑called “heat list” of popular names that Moomoo users most frequently held or searched for. In fact, on December 27, 2024, five of the seven “quantum” stocks mentioned earlier ranked among the top 50 names on Moomoo’s popularity list.
This strongly suggests that confusion over the word “quantum” and the investments it triggered were not confined to Korea, but were a widespread phenomenon among retail investors around the world. In other words, the tendency to make investment decisions simply because a company’s name includes the word “quantum” was not limited to any single country. Our analysis allowed us to track how investors behaved toward companies genuinely involved in quantum computing versus those whose names merely sounded similar.
To err is human. But recklessly repeating the same mistakes out of a vain desire to get rich quickly is a hallmark of retail investors.
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