Quantum shares such as Ionq, D-Wave & Co. are the next trend topic on the market after the non-breaking hype about artificial intelligence. The new popularity among investors who do not want to miss the next trend is also associated with great volatility. Before an investment is carried out in quantum computing shares, a look at this important key figure should therefore be taken.
• Quantum shares with large price fluctuations
• Average True Range can help with investment decision
• ATRS of quantum computing shares (too) tend to be high
Quantum shares such as Ionq, D-Wave & Co. have put a real course observer in the past twelve months. While the 12-montas performance of the IONQ, D-Wave, Quantum Computing and Rigetti Computing’s shares in each case with a three-digit course plan, things have been different since the beginning of the year. Here all four quantum shares have a negative performance (as of: final courses of April 3, 2025).
Nevertheless, the hype about the prospect of quantum technology continues to be unbroken. Even Nvidia CEO Jensen Huang recently admitted as part of the Quantum Day of the Nvidia-GTC that his original doubts that useful quantum computers would be on the market over the next 15 years were wrong. Instead, the Nvidia boss now sees parallels between the still young quantum companies that are still stuck in the loss zone, and the beginning of his own company, which has now become the market leader in the AI area. “I find the progress of the industry incredible,” said Huang, according to Barron’s.
Key figure “Average True Range” (ATR)
However, before an investment is considered in one of the listed quantum computing companies, Investor’s Business Daily (IBD) recommends that you to draw a view of an important key figure, which should help particularly volatile stocks. This is the key figure “Average True Range” (ATR), ie the “true average trading range”. For this purpose, the difference between the daily high and the daily low is determined and divided by the final course of the previous session. However, if a share has risen very strongly, it is not the daily low, but the closing price of the previous day to determine the ATR. The same applies if the stock has recorded a strong minus. The high -daily high is then not used here, but also the day of the day. As Investor’s Business Daily argues, this helps to better present the actual range. In order to read how strongly the fluctuations of a share fail within the last four weeks, the sliding 21-day average of the ATR should be used.
According to the IBD, such shares are recommended for an investment, the ATR value of which is five percent or less. However, IBD market strategist Mike Webster points out that you can still find “quality shares” with a 21-day average of the ATRS of five to seven percent, “but as soon as you go over seven percent, it becomes scraped,” the expert is cited in the IBD article. In view of the current rather unpredictable market conditions, IBD even recommends stocks with an ATR of 3 percent or less.
ATRS of quantum computing shares (too) tend to be high
Unsurprisingly, the ATRs of quantum computing shares are rather high. The sliding 21-day average of the ATRs from IonQ, Quantum Computing, D-Wave and Rigetti was between 11.02 percent and 16.56 percent at the end of March. However, there are numerous established market sizes such as Nvidia, Palantir or Google, which also invest in the quantum computing area and come with significantly lower ATRs. While that of Nvidia at 5.7 percent at the end of March and that of Palantir was 8.16 percent, Google’s only 3.05 percent.
Of course, a high ATR does not have to prevent an investment into a quantum computing share. However, it does not hurt to keep it in mind. Against this background, an investment appears less risky in an established tech size that positions itself in the quantum computing area.
Editor finance.net
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