The recent rally in highly shorted stocks is viewed as a speculative mania that is at or near its peak. The Quantum Computing sector is considered particularly overhyped, with recent gains in stocks like IonQ (Q) and Rigetti (RGTI) seen as disconnected from fundamentals. D-Wave (QBTS) is identified as a high-conviction short opportunity, based on the belief that the company has no customers and questionable value. Rigetti (RGTI) is also considered a compelling short, as its long-term potential is viewed with significant skepticism. Investors should be extremely cautious with these speculative names, as a sharp reversal is considered likely.

Investment Theme: Highly Shorted Stocks

• The speaker notes a significant rally in the most heavily shorted stocks, citing a "short UBS" index (likely a UBS report or index tracking these stocks) that is up 30% this month.
• He describes the situation as a "wild mania" where "all the shorts are being pumped."
• Specific examples of this phenomenon include OpenDoor (OPEN), Newegg (NEGG), Big Bear (BBAI), and several quantum computing stocks.
• The speaker repeatedly states "Top is in," suggesting he believes this rally is at or near its peak and a reversal is likely.

Takeaways

• Be extremely cautious with stocks that have high short interest and have experienced recent, rapid price increases.
• The speaker believes this rally is driven by market mechanics (a potential short squeeze) rather than strong company fundamentals.
• The sentiment is bearish on the continuation of this trend, implying that these stocks could see a significant price drop if the mania subsides.

Sector: Quantum Computing

• The speaker notes that some quantum stocks have doubled recently, but expresses significant skepticism about the sector as a whole.
• He mentions that a recent Jeffries call with a quantum expert was highly negative on the industry's prospects ("he shat on the whole thing").
• He points out that Shor's algorithm, a famous theoretical application for quantum computers, is "still theoretical" and has never been successfully run, undermining the current hype.
• The rally in quantum stocks like IonQ (Q), Oclaro (OCLO), D-Wave (QBTS), and Rigetti (RGTI) is viewed as part of the broader mania in highly shorted stocks, not a reflection of a fundamental breakthrough.

Takeaways

• The quantum computing sector is currently viewed as highly speculative and potentially in a bubble.
• The recent price appreciation may be disconnected from the actual technological progress in the field.
• Investors should be aware that the underlying technology is still largely theoretical, and the current valuations may be based on hype rather than proven commercial viability.

D-Wave Quantum Inc. (QBTS)

• The speaker identifies D-Wave as "the better short" among the quantum computing stocks.
• He makes a strong bearish case, calling the company "basically just a scam" and "pathetic."
• The primary reason for this view is the claim that D-Wave has "no customers."
• He notes that while the stock has gone up a lot (making a short position painful), he has a short position that he has found "manageable."

Takeaways

• The speaker has a strong bearish conviction on D-Wave, believing it is fundamentally worthless.
• He is actively shorting the stock, considering it the best target for a bearish bet in the quantum sector.
• Risk: Shorting a stock that is part of a market mania is extremely risky, as the price can continue to rise irrationally, leading to large losses.

Rigetti Computing, Inc. (RGTI)

• The speaker states that Rigetti is "still a short."
• He questions the company's long-term value, asking, "how much value could this company ever make?"
• He dismisses the bullish argument that the stock has "permanent call option value" on the future of quantum computing, calling it a way to "torture your mind" and a "stretch." This argument suggests some traders are holding it as a long-shot bet that might pay off big one day.

Takeaways

• The speaker is bearish on Rigetti and recommends it as a short position for those with the capital.
• He believes the company's potential is questionable and that the "option value" argument is a weak justification for its current price.
• Risk: As with D-Wave, shorting RGTI is high-risk due to the ongoing speculative rally in the sector.

Nektar Therapeutics (NKTR)

• The speaker mentions that he is "long Nektar."
• He qualifies this by stating it is a "very small amount."

Takeaways

• This is a mildly bullish mention. The speaker has a position, indicating some belief in the company's upside.
• However, the small position size suggests it is likely a speculative bet and not a high-conviction investment.

Other Mentioned Stocks

• Pfizer (PFE): A listener requested the speaker look at it, but no analysis or opinion was provided.
• OpenDoor (OPEN): Mentioned as an example of a highly shorted stock experiencing a massive rally, with its performance making the quantum stocks "look small." This is used to illustrate the scale of the market mania.
• IonQ (Q) & Oclaro (OCLO): Graphed to show that the rally is broad-based across the quantum/speculative tech sector, with OCLO noted as having performed even better than Q over the last three months.
• Newegg (NEGG) & Big Bear (BBAI): Mentioned as other examples of stocks caught up in the "gigantic" rally of highly shorted names.
• Anthropic (Private Company): The speaker notes that even this private AI company has seen performance similar to the publicly traded "mania stocks," suggesting a widespread speculative fever. This is not an actionable investment for the public.