Rigetti Computing Surges 679% Amid Quantum Advancements

Rigetti Computing's stock has soared 678.9% in three months. The firm's advancements in quantum computing and partnerships are driving growth, despite industry challenges. Investors should evaluate RGTI's potential amidst this volatile market.

Date: 20-01-2025

AI Rating: 6

Stock Performance and Market Context
Rigetti Computing's stock (RGTI) has shown remarkable growth of 678.9% over the last three months, significantly outpacing the Zacks Internet - Software industry’s return of 8.6% and the broader Computer & Technology sector’s gain of 4.5%. Additionally, Rigetti's performance surpasses that of its competitor D-Wave Quantum (QBTS), which saw a 335.5% increase in the same timeframe.

Innovations in Quantum Computing
Rigetti's advancements in the quantum computing space have been crucial in driving the company’s share price appreciation. The launch of the 84-qubit Ankaa-3 quantum computer, designed to enhance performance and scalability, is a pivotal step forward. The high fidelity rates (99% iSWAP gate fidelity and 99.5% fSim fidelity) of the new system support advanced algorithms, positioning Rigetti strategically in the market.

Revenue Growth and Earnings Estimates
The Zacks Consensus Estimate for Rigetti’s 2025 revenues stands at $15.32 million, reflecting a promising growth rate of 40.29% year-over-year. However, the consensus for loss per share remains at 28 cents, implying an increase of 17.65%. This upward trend in revenue estimates indicates potential for future financial recovery, though losses are still anticipated.

Market Challenges
Despite RGTI's strides in technology and partnerships with Riverlane, NVIDIA, and Quantum Machines, the company faces macroeconomic uncertainties and fierce competition. Detrimental sentiments expressed by industry leaders, such as doubts from Meta's and NVIDIA's CEOs about the near-term viability of quantum computing, have adversely impacted RGTI’s stock, evidenced by a 12.54% decrease on January 17, 2025.

Investor Outlook
Currently, RGTI's stocks are deemed overvalued with a Value Score of F, indicated by a forward Price/Sales ratio of 113.48X against the sector’s average of 7.02X. This could suggest potential risks for investors looking to capitalize on RGTI's growth. Rigetti’s Zacks Rank of #3 (Hold) implies a cautious approach for investors, recommending waiting for better entry points before accumulating shares.

Stocks: RGTI QBTS AMZN MSFT