Investing in Quantum Computing: A Look at Rigetti Computing
Quantum computing has emerged as a promising sector in technology investment. While many may not fully understand its complexities, the potential for transformative growth is clear.
Currently, one notable player in this field is Rigetti Computing (NASDAQ: RGTI). Despite facing struggles this year, some investors might consider adding this stock to their portfolios.
Understanding the Quantum Computing Landscape
Enthusiasm surrounding quantum computing stems from its ability to enhance computational efficiency significantly. In 2019, Google, owned by Alphabet, claimed its quantum computer could perform in 200 seconds a task that a supercomputer would require 10,000 years to complete.
The essence of quantum computing lies not just in tackling complex problems but in achieving these computations at scale. As concerns regarding energy usage in artificial intelligence (AI) mount, the demand for more efficient computing solutions has never been greater.
However, the journey to widespread quantum computing may be prolonged. A recent McKinsey report indicates that it is still a “long-term race to achieve the quantum volume” necessary to address real-world issues effectively. Many industry leaders and experts predict that we won’t see a fully operational quantum computer until at least 2035, with some estimates pushing it to 2040 or later.
This indicates that, despite Rigetti’s advancements, the path to commercial viability remains uncertain. Earlier this year, when Nvidia‘s CEO Jensen Huang stated that genuine utility in quantum computing might still be 15 to 30 years away, Rigetti’s shares plummeted and have yet to recover.
Rigetti’s Current Valuation Challenges
While shares of Rigetti have shown some recent improvement, they have still depreciated by over 35% since the beginning of the year. Nonetheless, the company retains a market capitalization of nearly $3 billion. It is crucial to note that investing in Rigetti carries significant risks, with mounting losses being a concerning trend.
In the previous fiscal year, Rigetti reported sales of less than $11 million, while operating expenses soared to over $74 million—nearly seven times the sales. The forecast for achieving profitability appears bleak, especially if it takes a decade for quantum computing to become commercially viable, which could lead to more losses and potential stock offerings for funding.
With a market cap significantly higher than its revenue, Rigetti trades at over 180 times its trailing revenue. Despite the recent decline in its stock price, it remains a challenging investment to justify as a “cheap” stock given the underlying risks.
Should Investors Consider Rigetti Computing?
Investing in Rigetti is undeniably a high-risk venture. For those willing to embrace significant risk, considering a small investment (less than 5% of your portfolio) may be appropriate, keeping in mind the possibility of losing most, if not all, of that investment. The company could see its valuation climb if it manages to capitalize on long-term industry advancements.
For most investors, however, the uncertainties ahead may make it unwise to invest at this time. Those willing to take the plunge must exercise patience as they navigate the volatility of this stock.
Is Now the Right Time to Invest in Rigetti Computing?
Before purchasing stock in Rigetti Computing, here are some considerations:
The Motley Fool analyst team has identified what they believe are the 10 best stocks to buy right now, and Rigetti Computing is not part of this list. These selected stocks could generate significant returns in the coming years.
For instance, if you invested $1,000 in Netflix when it made the list on December 17, 2004, that investment would now be worth $611,589!
Likewise, if you invested in Nvidia when it made the list on April 15, 2005, you’d have $697,613!
The Motley Fool’s Stock Advisor boasts an average return of 894%, significantly outperforming the S&P 500’s 163% return. Don’t miss the opportunity to review the latest top 10 list available through Stock Advisor.
*Stock Advisor returns as of May 5, 2025
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
