Rigetti Computing, Inc. (NASDAQ:RGTI) experienced a significant drop of 12.54 percent last Friday, closing at $9.83 per share. This decline occurred despite an overall positive market sentiment, with Wall Street’s main indices all finishing in the green territory.
Investors appeared to reallocate their portfolios in favor of sectors offering higher potential returns, such as Bitcoin mining stocks, which led the rally on the last trading day of the week. Quantum computing stocks, including Rigetti, have faced challenges over the past few weeks due to bearish statements from chief executives. Nvidia Corp.’s Jensen Huang and Meta Platforms’ Mark Zuckerberg have expressed skepticism about the practical use of quantum computers, suggesting that it may still be 15 to 30 years away.
However, Huang asserted that Nvidia would play a significant role in developing quantum computing technology. While Rigetti Computing shows potential as an investment, many investors are currently favoring AI stocks, which are expected to deliver higher returns more swiftly. The company, founded in 2013, aims to revolutionize the field by making quantum technology more accessible and has made significant strides in developing quantum hardware and software.
Rigetti computing faces significant challenges
Rigetti has a robust online following, with excited investors and aficionados driving discussions on platforms like Reddit. This growing interest has increased trading volumes, raising eyebrows across Wall Street.
Renowned investor James Foord believes that RGTI offers the highest return potential among quantum computing stocks. Rigetti Computing offers the highest return potential among quantum stocks,” claims Foord. He notes that RGTI has some exciting catalysts on the horizon, including developing a 100-qubit computer by the end of the year.
However, Foord acknowledges the significant risks involved with quantum computing stocks, which are prone to make double-digit moves in either direction. He suggests that these might be too risky for most investors and recommends considering an ETF or a larger company working on quantum computing, such as Alphabet or IBM, for those with a more long-term approach. RGTI holds a Strong Buy consensus rating on Wall Street based on six “buy” recommendations.
However, the stock’s rapid ascent has outpaced analysts’ current projections. A 12-month average price target of $6.10 implies a ~46% downside from its current level. This suggests analysts might revisit RGTI soon to update their ratings and price targets.
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