The sharp selloff in quantum computing stocks in the recent weeks has propelled a niche group of leveraged inverse ETFs to the top of the performance charts, as investors bet against some of the sector’s biggest names.
The Defiance Daily Target 2x Short IONQ ETF (NASDAQ:IONZ) surged 37% over the past week and is now up 108% over the past month. The Defiance Daily Target 2x Short QBTS ETF (NASDAQ:QBTZ) gained 29% this week and 46% over the past month, while the Defiance Daily Target 2x Short RGTI ETF (NASDAQ:RGTZ) climbed 23% during the week and 69% over the same one-month period.
The gains came as the underlying quantum computing stocks extended a brutal correction. IonQ Inc. (NASDAQ:IONQ) fell 13% over the past week and 35% in the past month. D-Wave Quantum Inc. (NYSE:QBTS) dropped 11.5% this week and 24% over the month, while Rigetti Computing Inc. (NASDAQ:RGTI) declined 9% and 29%, respectively. All three stocks now trade roughly 60% to 76% below their 52-week highs, underscoring how sharply sentiment has reversed after last year’s speculative rally.
Why Quantum Stocks Are Falling
Quantum computing stocks were among the market’s biggest winners in late 2025 and early 2026, with several names rallying 300% to 600% on expectations that breakthroughs in quantum hardware and software would rapidly translate into commercial adoption. That enthusiasm has faded as investors reassess the industry’s near-term revenue potential.
At the Quantum.Tech World Conference earlier this month, analysts at Bank of America said the industry still lacks the commercially relevant algorithms and fault-tolerant hardware needed for broad quantum advantage — reinforcing concerns that meaningful monetization remains years away.
The selloff has also coincided with a broader rotation out of speculative technology stocks. The Philadelphia Semiconductor Index has fallen more than 19% from its June peak, while recent weakness in large-cap technology has further pressured high-beta, early-stage growth companies.
Bear ETFs Ride the Downturn
The strong performance of IONZ, QBTZ and RGTZ highlights how leveraged inverse ETFs can benefit during sharp declines in individual stocks. These funds seek to deliver twice the inverse of the daily performance of their respective underlying stocks, magnifying gains when share prices fall but also amplifying losses if sentiment reverses.
Because these ETFs reset daily, they are generally designed for short-term tactical trading rather than long-term buy-and-hold strategies.
Long-Term Outlook Remains Intact
Despite the recent correction, the broader investment case for quantum computing has not disappeared.
Google research published earlier this year suggested quantum computers capable of breaking modern encryption could emerge by 2029, earlier than previously expected.
Meanwhile, commercial activity continues to build. Quantinuum Inc (NASDAQ:QNT) recently signed a multi-year agreement with Rolls-Royce to apply quantum computing to gas turbine design, while IQM Quantum secured a 150-qubit deployment contract for Finland’s LUMI AI Factory.
Government support also remains strong following a U.S. executive order promoting quantum technologies, and Wall Street has maintained a constructive long-term view on the sector.
For now, however, the market is rewarding investors positioned for further downside, making quantum bear ETFs among the strongest performers during one of the sector’s steepest pullbacks this year.
Photo: Shutterstock
