Rigetti Computing’s Stock Soars: Is There More Growth Ahead?

Though Rigetti Computing (NASDAQ: RGTI) recently witnessed a staggering 500% increase in its stock price within just a month, future growth prospects may be even brighter. Quantum computing offers revolutionary capabilities that set it apart from traditional computers. Unlike binary bits, which can only represent a one or zero value, qubits in quantum systems can exist in multiple states simultaneously. This unique feature allows quantum computers to tackle complex calculations and analyze vast amounts of data, enabling numerous possibilities in a single process.

The Growing Potential of Quantum Applications

Quantum computing can significantly impact various fields, including financial modeling, drug discovery, and materials science. Yet, as the technology develops, a key challenge arises: the number of errors tends to increase with growing complexity and more qubits. Such volatility, common with emerging technologies, can lead to rough patches. However, for investors seeking less risky pathways with potential upside, the High-Quality Portfolio has consistently outperformed the S&P 500, boasting returns exceeding 91% since its inception.

New Developments and Government Support

Recent advancements like Google’s Willow chip and Amazon’s Quantum Embark have contributed to a surge in interest across quantum stocks, including RGTI. Additionally, a promising $2.7 billion government funding initiative for quantum computing has further fueled the sector’s positive momentum. Rigetti is strategically positioned as a leader in this emerging technology landscape. The company enables developers to harness quantum computing through its innovative offerings, including the 9-qubit quantum processing unit (QPU) known as Novera and a Quantum Computing as a Service (QCaaS) platform for seamless integration across cloud environments.

A Long Path Ahead

While the potential of quantum computing is vast, it remains largely experimental and not yet ready for broad application. Currently, Rigetti’s revenue relies on development contracts with partners. Their long-term strategy focuses on selling QPUs to drive future sales growth.

Market Volatility and Stock Performance

Investors should be aware that RGTI stock presents a high-risk, high-reward scenario influenced by technological advancements and costs. Over the next decade, Rigetti might sell hundreds of QPUs, sustaining potential stock growth. Historically, however, RGTI has shown significant volatility in comparison to broader markets, showing -92% return in 2022 followed by a 35% rise in 2023. In contrast, the Trefis High Quality (HQ) Portfolio, containing 30 stocks, has exhibited much lower volatility and has outperformed the S&P 500 annually during the same periods.

[1] Returns as of 12/17/2024
[2] Cumulative total returns since the end of 2016

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.