Imagine turning a $10,000 investment into over half a million dollars in just one year. Sounds like a dream, right? Well, that's exactly what happened to early investors in Rigetti Computing (NASDAQ: RGTI), a quantum computing company whose shares skyrocketed by a staggering 5,100% in the past 12 months. But here's where it gets controversial: Is this meteoric rise a sign of things to come, or is it too late to jump on the bandwagon? And this is the part most people miss—quantum computing, while revolutionary, is still in its infancy, and Rigetti’s journey to profitability is far from guaranteed.
Rigetti Computing has captured the imagination of investors by taking a holistic approach to the quantum computing industry. Unlike some competitors, Rigetti designs and manufactures its own quantum processing units (QPUs) and has even developed its own programming language, Quil. Coupled with its Quantum Cloud Services (QCS) platform, the company aims to make quantum computing accessible to clients via the cloud. This comprehensive strategy has undoubtedly fueled its explosive stock rally.
However, the road ahead is fraught with challenges. While quantum computing promises to solve complex problems that are beyond the reach of classical computers—think drug discovery, material science, and artificial intelligence—the technology is still years, if not decades, away from widespread commercialization. For instance, McKinsey & Company estimates that scalable quantum devices might not become commercially viable until at least 2040. But here's the kicker: Rigetti’s financial health is already raising red flags.
In the second quarter, the company reported operating losses of $19.8 million, a 24% increase year over year, with revenue of just $1.8 million. To make matters worse, the number of outstanding shares surged by 74%, diluting existing shareholders’ stakes. While Rigetti raised $350 million in a stock offering last June, this cash reserve won’t last forever. The company will likely need to rely on further equity financing to stay afloat until it can turn a profit—a prospect that could further dilute shareholders’ positions.
Despite these challenges, Rigetti has secured some promising deals, such as a $5.7 million purchase order for its Novera quantum computing systems, expected to be delivered in 2026. Yet, these early wins are unlikely to signal the start of mass adoption. Nonprofit research institutions and tech-savvy early adopters may continue to experiment with quantum computing, but mainstream commercialization remains a distant goal.
So, is it too late to buy Rigetti stock? Not necessarily—but it might be too early. Here’s the controversial take: While Rigetti’s potential is undeniable, the company’s current valuation may already reflect overly optimistic expectations. Investors might be better off waiting for a market correction or a significant technological breakthrough before considering a position. After all, even the most groundbreaking technologies require time to mature.
Before you decide to invest $1,000 in Rigetti Computing, consider this: The Motley Fool’s Stock Advisor has identified 10 stocks with potentially massive returns—and Rigetti isn’t one of them. For example, if you’d invested $1,000 in Netflix when it was recommended in 2004, you’d have $646,805 today. Similarly, a $1,000 investment in Nvidia in 2005 would now be worth over $1.1 million. With an average return of 1,055%, Stock Advisor’s picks have consistently outperformed the market.
Thought-provoking question: Is Rigetti’s current valuation justified, or are investors betting on a future that may take longer to materialize than expected? Share your thoughts in the comments—we’d love to hear your take on this high-stakes gamble in the world of quantum computing.
