Rigetti Computing Stock Plummets 11.6% Amid Tech Sell-Off
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: Fool
- Significant Stock Drop: Rigetti Computing's stock plummeted 11.6% by 11:30 a.m. ET on Friday, with a current price of $21.18 and a market cap of $8 billion, reflecting widespread market concerns over tech stocks.
- Market Sentiment Impact: The decline is not attributed to poor earnings or analyst downgrades but rather a broader sell-off in tech stocks, particularly with Bitcoin and Nvidia also experiencing losses, leading to a bearish investor sentiment.
- Risk-Off Day: The market's 'risk-off' sentiment appears to be triggered by Broadcom's earnings warning, which indicated that sales of its AI chips would only triple in Q3, failing to meet analysts' expectations and causing panic across the tech sector.
- Uncertain Profit Outlook: Despite the stock's decline, analysts predict that Rigetti may not achieve profitability until 2030, as the company is expected to burn through hundreds of millions in cash, prompting investors to carefully assess their risk tolerance before considering a buy.
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Analyst Views on RGTI
Wall Street analysts forecast RGTI stock price to rise
10 Analyst Rating
7 Buy
3 Hold
0 Sell
Moderate Buy
Current: 20.680
Low
30.00
Averages
39.75
High
51.00
Current: 20.680
Low
30.00
Averages
39.75
High
51.00
About RGTI
Rigetti Computing, Inc. is a full-stack quantum computing company. The Company operates quantum computers over the cloud and serves global enterprise, government, and research clients through its Rigetti Quantum Cloud Services platform. The Company’s quantum-classical infrastructure provides high-performance integration with public and private clouds for practical quantum computing. It has developed a multi-chip quantum processor for scalable quantum computing systems. Through the Company’s Quantum Computing as a Service (QCaaS) platform, its machines can be integrated into any public, private or hybrid cloud. It is also engaged in the sale of quantum processing units (QPUs) and custom computing components, and development contracts and other services. Its QPUs contain fabricated silicon-based chips featuring superconducting qubits. The Company designs and manufactures its chips in-house at Fab-1, an integrated quantum device manufacturing facility.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Promising Stocks in Quantum Computing Sector
- Quantum Computing Outlook: Bernstein's analyst team believes quantum computing will represent a significant step in computing, driving future technology profits through a tri-processor architecture (CPUs, GPUs, and QPUs), highlighting its strategic importance.
- Investment Opportunities: Rigetti Computing (RGTI) and Infleqtion (INFQ) are identified as having a more attractive risk-reward ratio, with current market share expectations of only 4% and 2% respectively, indicating substantial upside potential if they capture larger market opportunities.
- Rigetti's Growth Potential: Mizuho analysts noted that Rigetti has approximately $590 million in cash and equivalents, and its newly launched 9-qubit Novera QPU could drive technological advancements, with a price target of $33 implying nearly 60% upside from current levels.
- Infleqtion's Partnership Advantage: Infleqtion's collaboration with Nvidia is seen as a key validation of technology, with Citi and BTIG assigning price targets of $20 and $22 respectively, suggesting 37% and 51% upside potential, showcasing its dual advantages in quantum computing and artificial intelligence sectors.
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- Quantinuum IPO Performance: Quantinuum's IPO debuted at $60 on Nasdaq, but shares fell 8% on the second day, raising concerns about its high valuation, which exceeded $15 billion after generating nearly $1.7 billion, reflecting investor caution in the quantum computing sector.
- Market Reaction: Following Quantinuum's debut, IonQ and D-Wave Quantum shares dropped 12%, while Rigetti Computing fell 12.5% and Quantum Computing declined by 9%, indicating significant pressure on quantum stocks and a bearish investor sentiment.
- Overall Market Impact: The Nasdaq index fell nearly 3%, the Dow Jones dropped 0.8%, and the S&P 500 decreased by 1.7%, suggesting that the decline in quantum stocks aligns with the broader market trend, influenced by negative investor sentiment.
- Tech Sector Performance: The Philadelphia Semiconductor Index plummeted 8%, and the iShares Expanded Tech-Software Sector ETF fell 3.5%, highlighting increasing pressure on the tech industry and diminishing investor confidence in future growth prospects.
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Quantum Stocks Decline While Consumer Staples Rise
- Quantum Stocks Struggle: Quantinuum's debut on Nasdaq was lackluster, closing flat and subsequently dropping over 8% on Friday, falling below its IPO price of $60 per share, indicating market caution towards the quantum computing sector which may impact future funding and investor confidence.
- Consumer Staples Surge: Amid Friday's market sell-off, the consumer staples sector rose 2%, with companies like Colgate-Palmolive, Coca-Cola, and Procter & Gamble gaining over 3%, reflecting investor preference for defensive stocks, which could lead to a shift in capital towards these stable industries.
- Strong Performance in Medical Devices: Cooper Companies reported second-quarter adjusted earnings of $1.21 per share, exceeding the $1.10 consensus estimate, with revenue of $1.08 billion surpassing the $1.05 billion forecast, showcasing robust performance in the medical device sector that may attract more investor interest.
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Rigetti Computing Stock Plummets 11.6% Amid Tech Sell-Off
- Significant Stock Drop: Rigetti Computing's stock plummeted 11.6% by 11:30 a.m. ET on Friday, with a current price of $21.18 and a market cap of $8 billion, reflecting widespread market concerns over tech stocks.
- Market Sentiment Impact: The decline is not attributed to poor earnings or analyst downgrades but rather a broader sell-off in tech stocks, particularly with Bitcoin and Nvidia also experiencing losses, leading to a bearish investor sentiment.
- Risk-Off Day: The market's 'risk-off' sentiment appears to be triggered by Broadcom's earnings warning, which indicated that sales of its AI chips would only triple in Q3, failing to meet analysts' expectations and causing panic across the tech sector.
- Uncertain Profit Outlook: Despite the stock's decline, analysts predict that Rigetti may not achieve profitability until 2030, as the company is expected to burn through hundreds of millions in cash, prompting investors to carefully assess their risk tolerance before considering a buy.
See More
IonQ Competes with D-Wave and Rigetti in Quantum Stocks
- Market Competition: IonQ, D-Wave, and Rigetti are fiercely competing in the quantum computing stock market, where despite poor stock performance, their business models reveal complex growth potential, particularly in government contracts and technology risks.
- Revenue Growth Potential: IonQ's revenue growth is closely tied to its technological innovations, and despite market fluctuations, its leading position in quantum computing may pave the way for future acquisition opportunities.
- Government Contract Impact: By securing government contracts, IonQ has strengthened its market position, which not only provides a stable revenue stream but also enhances its competitiveness within the industry.
- Technology Risks and Opportunities: While quantum computing technology faces significant risks, IonQ's advancements may position it favorably in future markets, thereby influencing investor confidence and market performance.
See More
Intense Competition in Quantum Computing Stocks
- Intensifying Market Competition: IonQ, D-Wave, and Rigetti are engaged in fierce competition within the quantum computing sector, where despite damaged stock prices, their business models reveal complex growth potential.
- Revenue Growth Potential: Despite facing market challenges, IonQ and its competitors are showing signs of revenue growth, indicating a gradual increase in demand for quantum computing technologies.
- Government Contract Opportunities: All three companies are vying for government contracts, which not only provide a stable revenue source but also enhance their market positions in the quantum computing field.
- Technology Risks and Acquisition Potential: With technology risks intertwined with acquisition potential, the future development of IonQ, D-Wave, and Rigetti will depend on how effectively they manage these challenges and seize market opportunities.
See More
Promising Stocks in Quantum Computing Sector
- Quantum Computing Outlook: Bernstein's analyst team believes quantum computing will represent a significant step in computing, driving future technology profits through a tri-processor architecture (CPUs, GPUs, and QPUs), highlighting its strategic importance.
- Investment Opportunities: Rigetti Computing (RGTI) and Infleqtion (INFQ) are identified as having a more attractive risk-reward ratio, with current market share expectations of only 4% and 2% respectively, indicating substantial upside potential if they capture larger market opportunities.
- Rigetti's Growth Potential: Mizuho analysts noted that Rigetti has approximately $590 million in cash and equivalents, and its newly launched 9-qubit Novera QPU could drive technological advancements, with a price target of $33 implying nearly 60% upside from current levels.
- Infleqtion's Partnership Advantage: Infleqtion's collaboration with Nvidia is seen as a key validation of technology, with Citi and BTIG assigning price targets of $20 and $22 respectively, suggesting 37% and 51% upside potential, showcasing its dual advantages in quantum computing and artificial intelligence sectors.
See More
Quantum Stocks Plummet Following Quantinuum's Lackluster IPO Performance
- Quantinuum IPO Performance: Quantinuum's IPO debuted at $60 on Nasdaq, but shares fell 8% on the second day, raising concerns about its high valuation, which exceeded $15 billion after generating nearly $1.7 billion, reflecting investor caution in the quantum computing sector.
- Market Reaction: Following Quantinuum's debut, IonQ and D-Wave Quantum shares dropped 12%, while Rigetti Computing fell 12.5% and Quantum Computing declined by 9%, indicating significant pressure on quantum stocks and a bearish investor sentiment.
- Overall Market Impact: The Nasdaq index fell nearly 3%, the Dow Jones dropped 0.8%, and the S&P 500 decreased by 1.7%, suggesting that the decline in quantum stocks aligns with the broader market trend, influenced by negative investor sentiment.
- Tech Sector Performance: The Philadelphia Semiconductor Index plummeted 8%, and the iShares Expanded Tech-Software Sector ETF fell 3.5%, highlighting increasing pressure on the tech industry and diminishing investor confidence in future growth prospects.
See More
Quantum Stocks Decline While Consumer Staples Rise
- Quantum Stocks Struggle: Quantinuum's debut on Nasdaq was lackluster, closing flat and subsequently dropping over 8% on Friday, falling below its IPO price of $60 per share, indicating market caution towards the quantum computing sector which may impact future funding and investor confidence.
- Consumer Staples Surge: Amid Friday's market sell-off, the consumer staples sector rose 2%, with companies like Colgate-Palmolive, Coca-Cola, and Procter & Gamble gaining over 3%, reflecting investor preference for defensive stocks, which could lead to a shift in capital towards these stable industries.
- Strong Performance in Medical Devices: Cooper Companies reported second-quarter adjusted earnings of $1.21 per share, exceeding the $1.10 consensus estimate, with revenue of $1.08 billion surpassing the $1.05 billion forecast, showcasing robust performance in the medical device sector that may attract more investor interest.
- Software Stocks Outlook Weakens: Docusign's outlook failed to impress, with shares slipping 6% as it projected second-quarter revenue between $865 million and $869 million, slightly below consensus, potentially affecting its future market performance and investor confidence.
See More
Rigetti Computing Stock Plummets 11.6% Amid Tech Sell-Off
- Significant Stock Drop: Rigetti Computing's stock plummeted 11.6% by 11:30 a.m. ET on Friday, with a current price of $21.18 and a market cap of $8 billion, reflecting widespread market concerns over tech stocks.
- Market Sentiment Impact: The decline is not attributed to poor earnings or analyst downgrades but rather a broader sell-off in tech stocks, particularly with Bitcoin and Nvidia also experiencing losses, leading to a bearish investor sentiment.
- Risk-Off Day: The market's 'risk-off' sentiment appears to be triggered by Broadcom's earnings warning, which indicated that sales of its AI chips would only triple in Q3, failing to meet analysts' expectations and causing panic across the tech sector.
- Uncertain Profit Outlook: Despite the stock's decline, analysts predict that Rigetti may not achieve profitability until 2030, as the company is expected to burn through hundreds of millions in cash, prompting investors to carefully assess their risk tolerance before considering a buy.
See More
IonQ Competes with D-Wave and Rigetti in Quantum Stocks
- Market Competition: IonQ, D-Wave, and Rigetti are fiercely competing in the quantum computing stock market, where despite poor stock performance, their business models reveal complex growth potential, particularly in government contracts and technology risks.
- Revenue Growth Potential: IonQ's revenue growth is closely tied to its technological innovations, and despite market fluctuations, its leading position in quantum computing may pave the way for future acquisition opportunities.
- Government Contract Impact: By securing government contracts, IonQ has strengthened its market position, which not only provides a stable revenue stream but also enhances its competitiveness within the industry.
- Technology Risks and Opportunities: While quantum computing technology faces significant risks, IonQ's advancements may position it favorably in future markets, thereby influencing investor confidence and market performance.
See More
Intense Competition in Quantum Computing Stocks
- Intensifying Market Competition: IonQ, D-Wave, and Rigetti are engaged in fierce competition within the quantum computing sector, where despite damaged stock prices, their business models reveal complex growth potential.
- Revenue Growth Potential: Despite facing market challenges, IonQ and its competitors are showing signs of revenue growth, indicating a gradual increase in demand for quantum computing technologies.
- Government Contract Opportunities: All three companies are vying for government contracts, which not only provide a stable revenue source but also enhance their market positions in the quantum computing field.
- Technology Risks and Acquisition Potential: With technology risks intertwined with acquisition potential, the future development of IonQ, D-Wave, and Rigetti will depend on how effectively they manage these challenges and seize market opportunities.
See More
