🤩 Last week we asked ‘is the worst of the market crash over’, and for this week at least, the answer was yes.

📈 After a month of consecutive losses, where the S&P 500 fell -10% and entered ‘correction territory,’ this week we saw a much-welcomed turnaround:

• The S&P 500 rose +0.6%

• The Nasdaq 100 rose +0.4%

• The TSX rose +1.7%

• Bitcoin rose +1.1%

📉 But despite an overall green week, one sector was hit particularly hard - Quantum Computing - after Nvidia’s ‘Quantum Day’ back-fired.

🤿 Let’s dive in…

TOP STORY
😰 Nvidia CEO Triggers Quantum Stock Sell-Off (Again)

📉 Back in January, Jensen Huang, the CEO of Nvidia, caused Quantum stocks to freefall after saying that “useful quantum computers are probably at least 15-30 years away” - sparking outrage across the industry.

😬 In an attempt to boost the sector, Huang hosted the first ever Nvidia ‘Quantum Day’ this week, where he invited the CEOs of prominent Quantum companies to ‘explain why he was wrong’ and walked back on his January statements saying:

Huang had the opposite of his intended effect, with prominent Quantum computing stocks tumbling hard after the event:

• D-Wave Quantum ($QBTS) fell -23%

• Rigetti Computing ($RGTI) fell -20%

• IonQ ($IONQ) fell -11%

• Quantum Computing Inc ($QUBT) fell -13%

📉 So, Why Did Stocks Fall?

🤔 If Huang was trying to help the sector, why did he end up hurting it? From my research, I can find 3 main reasons:

1) 🗞️ Buy the Hype. Sell the News

Huang announced ‘Quantum Day’ back in January after his earlier comments caused a crash, and since then, Quantum stocks have soared (for example, $QBTS was up +191% since the dip on Jan 13 and before Quantum Day).

Many investors were buying up Quantum stocks in anticipation of a big announcement, and when none really happened, some investors ‘sold the news’, causing a slight pull-back for the high-flying stocks.

2) 🌙 From Moonshot to Middleware

Another reason for the dip was Huang’s comments that Quantum would ‘augment’ rather than ‘replace’ classical systems, saying:

This led some to worry that Quantum will just end up as another processor in an Nvidia-powered system, becoming components instead of platforms.

Huang also made comments that the quantum industry should reframe its machines as scientific instruments instead of computers, leading to pushback from D-Wave CEO Alen Baratz who said the computers are already being used for tasks that ‘go well beyond instrumentation and measurement.’

3) 👑 Nvidia’s Dominance

Adding to worries that Quantum start-ups would end up as a cog in the Nvidia behemoth, Nvidia announced that it is building the “Nvidia Accelerated Quantum Research Center” in Boston to integrate leading quantum hardware with AI supercomputers.

In the words of FastCompany, the announcement ‘sent shivers down the spines of many quantum computing investors’ as it reinforced how dominant Nvidia is and led to fears that the much smaller quantum start-ups may struggle to capture significant value in the space (Nvidia is over 1,000x bigger than the largest Quantum stock).

Another reason for the drop, unrelated to the Quantum Day event, was Quantum Computing Inc ($QUBT) reporting its Q4 financials, but before we take a look at the numbers and see how the Blossom community is reacting to all this news, a quick word from this week’s sponsor Fidelity Investments!

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TOP STORY CONT.
💰 Quantum Fundamentals

Quantum Day wasn’t the only bad news for the Quantum industry this week. Quantum Computing Inc ($QUBT) reported its Q4 financials, and, well, I’ll let you take a look for yourself:

• 💰 Revenue: $62,000, down 17% from last year and 85% below analyst expectations

• 😰 Net Loss: -$51M, compared to -$6.8M last year

For a company worth ~$1B, those are pretty wild numbers and signal that Quantum stocks are trading almost entirely on future hype rather than on fundamentals.

These results impacted the whole sector, adding to worries that meaningful revenue and applications for quantum may still be aways off.

🌼 My/Blossom’s Thoughts

🐻 As for me, I lean bearish on the industry and plan to steer clear, but I know I’m in the minority. In my poll on Quantum stocks in the January 12 Weekly Buzz:

• 📈 29% of readers said they were bullish

• 📉 20% said they were bearish

• 🤷🏻‍♀️ 51% said they were unsure

🏆 Based on Blossom data, across the 4 popular Quantum stocks mentioned above, there are nearly 1,000 holders on Blossom, with $QBTS ranking as the 90th most popular holding in the community.

👀 However, this week’s event did spark a bit of a sell-off, with QBTS, RGTI, and QUBT all charting as one of the top 100 most sold stocks of the week.

🙋‍♂️ I’d love to hear from you all what I’m missing about the industry so I’ve created a discussion post on Blossom here to kick-off the convo.

Looking forward to reading your thoughts and continuing to cover this sector in the Buzz as more news unfolds!

IN PARTNERSHIP WITH CBOE CANADA
⭐️ Starlight Capital Launches 2 New ETFs!

Starlight Capital, a Canadian Asset Manager with over $1B in assets, has launched two new funds: The Starlight North American Equity Fund (SCNA) and The Starlight Global Growth Fund (SCGG).

According to Starlight, here are a few reasons to check out SCNA:

• 📈 High-Quality Growth Focus – SCNA prioritizes companies with secular growth potential over cyclical trends, investing in businesses with sustainable revenue expansion and strong competitive advantages.

• 🦅 Strategic US Exposure – Recognizing that the TSX is heavily weighted in cyclical sectors like Financials, Energy, and Materials, SCNA expands beyond Canada’s market limitations by investing in high-growth sectors like Technology and Healthcare in the U.S.

• 🎯 Small & Mid-Cap Opportunities – Unlike larger funds constrained by size, SCNA has the flexibility to invest in high-quality small and mid-cap growth companies, which have historically offered incremental return potential without significantly increasing portfolio risk.

SCNA’s largest holdings include Amazon, Fortinet, Visa, Mastercard, and Boston Scientific Corp - with the top 25 holdings making up ~77% of the total fund.

SCGG takes a more global focus, with exposure to European companies in France, the UK, Switzerland, Germany, and more.

ALSO IN THE NEWS
🗞️ Other Key Headlines this Week

🍕 Doordash Partners with Klarna on ‘Eat Now, Pay Later’

• DoorDash ($DASH) is up 4% after announcing a partnership with Klarna to offer the option to pay for takeout and groceries in 4 installments or to postpone payment to a ‘more convenient time.’

• Some commentators say this is a worrying sign for the economy as American Debt levels continue to climb to now over $18 trillion.

• The news comes as Klarna prepares for a highly anticipated IPO later this year, with an expected $20-30B valuation.

👟 Nike Falls 6% As Tariffs Are Expected to Hurt Next Quarter’s Results

• Nike ($NKE) is down -7% this week after announcing that upcoming tariffs on imports from China and Mexico will likely reduce gross margins by 4% to 5% in the next quarter. ​

• The company also reported a 9% decline in sales from last year, with a 17% drop in the Chinese market, raising concerns about its global performance.

• Nike’s new CEO is doubling down on a ‘Win Now’ strategy focused on new product launches, strengthening e-commerce, and connecting with young athletes in an attempt to turn around the struggling company that is now down a massive -60% from its all-time highs.

🛢️ Energy Stocks Up Despite the Market Turmoil

• While the rest of the market has taken a tumble this year, Energy stocks have continued to rise, with both the Canadian BMO Equal Weight Oil & Gas Index ETF ($ZEO) and the American Energy Select Sector SPDR Fund ($XLE) up +3.1% year-to-date (compared to overall S&P 500 index which is down -3.4%)

• Even though oil prices have slipped 2% year-to-date, strong earnings from companies like ExxonMobil and Chevron and an overall diversification away from tech have benefited the industry.

• A favorable regulatory environment in the US is expected to lower production costs for US producers, but despite tariff worries, even popular Canadian energy stocks are up this year, with Enbridge ($ENB) up a significant +29% over the past year while continuing to pay a ~6% dividend.

🤠 Elon Holds Suprise All-Hands Meeting, Telling Employees to ‘Hang on to Your Stock’

• Elon Musk held a surprise all-hands meeting at Tesla ($TSLA), encouraging employees to ‘hang onto their stock’ and making big claims about the future of Tesla.

• These claims included saying that autonomous Tesla’s will soon be everywhere, the cybercab assembly line will start production in 2026 and be able to produce a car in less than 5 seconds, the Tesla Model Y would once again be the top-selling car in the world following its new update, and that the Optimus robot will be the best-selling product of all-time.

• Tesla jumped 5% after the meeting as Tesla optimists were happy to see Elon back taking leadership amid what Tesla bull and analyst Dan Ives called a ‘brand crisis’.

• Despite being down -48% from all-time highs, the stock is basically back where it was before the massive rally on the back of the Trump presidential victory.

BLOSSOM ON THE ROAD
🏖️ Blossom Represents at Futureproof Miami (ft. Michael Saylor)

😎 This last week, some of the Blossom team was out in Miami at the Futureproof conference, meeting some of our new US partners, including:

• State Street (the makers of $SPY and the 3rd largest ETF provider in the world)

• VanEck (the makers of $SMH and the 10th largest ETF provider in the world)

• Nasdaq (the 2nd largest stock exchange in the world)

🤝 Tim (Blossom’s Head of Partnerships) also got to hear Michael Saylor, CEO of MicroStrategy ($MSTR), speak about the future of Bitcoin and meet him afterward for a photo!

🔥 While the conference was more aimed towards financial advisors, it was amazing to see all the ETF providers start to take notice of the growing importance of DIY/retail investors like me and you, with many taking us much more seriously than even last year when we first attended the conference!

FROM THE BLOSSOM COMMUNITY
⭐️ Featured Discussions this Week

👇 Click to see the full post!