Rigetti Computing Stock Surge: Is It a Quantum Leap or a Temporary Blip?
Rigetti Computing (NASDAQ: RGTI) has made a remarkable comeback from its all-time low, capturing the attention of investors and tech enthusiasts alike. The company, known for developing quantum computing systems, went public in March 2022 by merging with a special purpose acquisition company (SPAC). While Rigetti’s stock plummeted to $0.38 in May 2023 following missed pre-merger estimates and the resignation of its founder, Chad Rigetti, as CEO, it has since rebounded to around $13.50. A $10,000 investment at the lowest point would have turned into over $333,000 in less than two years. But the question remains—what’s driving this recovery, and how will Rigetti perform in the next few years?
Why Did Rigetti’s Stock Impress the Market?
Quantum computing is poised to revolutionize the way we process information. Traditional computers rely on binary bits—zeros and ones—to store and compute data. Quantum computers, on the other hand, utilize quantum bits (qubits), which can exist in multiple states simultaneously. This breakthrough allows quantum computers to process massive amounts of data at unprecedented speeds. However, the technology is still in its infancy, with quantum systems being far larger, more expensive, and error-prone compared to traditional computers.
Rigetti Computing stands out as a “full-stack” player in the quantum market. The company not only designs and manufactures quantum processing units (QPUs) but also builds both modular and non-modular quantum computing systems and provides a cloud infrastructure platform for quantum application development. This one-stop-shop approach positions Rigetti to capitalize on the growing demand for quantum computing services.
In December, Rigetti launched its Novera QPU, a 9-qubit commercial quantum computer priced at $900,000, attracting customers like the Superconducting Quantum Materials and Systems Center (SQMS), the Air Force Research Lab (AFRL), and Horizon Quantum Computing in Singapore. These product launches signaled that Rigetti could continue to expand its business, even after the departure of Chad Rigetti as CEO.
What Are Rigetti’s Future Plans?
Rigetti isn’t resting on its laurels. The company has big plans for the coming years, aiming to build more powerful quantum computing systems. In 2024, Rigetti plans to release a modular quantum computing system combining four 9-qubit chips for a 36-qubit system with 99.5% median gate fidelity. By 2026, it expects to deploy a non-modular system with more than 100 qubits of processing power and a median gate fidelity of 99.5%. The company also has its sights set on launching a 336-qubit system within the next few years.
The quantum computing market is expected to grow significantly, with analysts projecting Rigetti to generate $11 million in revenue in 2024. That figure is expected to rise by 41% to $16 million in 2025 and then surge to $35 million in 2026. If these projections hold true, Rigetti could experience an impressive growth trajectory as it continues to roll out new products and expand its cloud platform.
The Growing Quantum Computing Market
While Rigetti’s future looks promising, it faces some challenges. Industry heavyweights like Nvidia’s CEO, Jensen Huang, have warned that “very useful quantum computers are still a few decades away.” This sentiment casts a shadow over the entire quantum sector, with investors questioning how quickly quantum computing will transition from experimental systems to commercially viable products.
Nevertheless, the quantum computing market is expected to grow at a compound annual growth rate (CAGR) of 34.8% from 2024 to 2032, according to Fortune Business Insights. If Rigetti can match this growth, it could generate $120 million in revenue by the end of the decade. However, with its current $3.7 billion enterprise value and trading at 105 times its projected 2026 sales, the stock may be overvalued, making it a risky investment for those expecting quick returns.
What’s Next for Rigetti Computing?
Rigetti’s stock remains volatile, with its performance largely driven by news and market sentiment. The company’s future growth depends on the successful development and commercialization of its quantum computing products. However, the road ahead is far from certain, and Rigetti’s stock could easily experience significant declines before it stabilizes at more sustainable valuation levels.
Investors looking to get in on the quantum computing revolution should approach Rigetti with caution, as its stock remains a speculative play in a technology that is still in the early stages of development. With unpredictable market fluctuations and an uncertain timeline for quantum computing’s mainstream adoption, the coming years will be crucial for Rigetti’s growth—and its investors.
Stay informed on the latest developments in quantum computing and follow Rigetti Computing’s progress to stay ahead in this rapidly evolving industry.
