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Chris MacDonald

Should You Buy the Dip in Rigetti Computing Stock in March 2025?

Rigetti Computing (RGTI) is among the quantum computing stocks that has seen incredible volatility over the past year. After Nvidia (NVDA) CEO Jensen Huang quipped that quantum computing technology could be decades away from true commercialization in January, shares of quantum computing stocks like Rigetti plunged. From a peak near $20, RGTI stock now trades under $9 per share

That said, putting this move in context is important. The quantum computing player has rebounded nicely off of its low following these comments below $6 per share and is moving in the right direction.

 

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Of course, the question now remains as to which direction Rigetti will head next. Is the future bright for the likes of Rigetti and is this dip worth buying? Or are investors best served by waiting and seeing what happens here? Let’s dive in. 

Quantum Computing Could Be the Future

Nvidia CEO Jensen Huang is clearly among the most important movers and shakers in the tech world. When Huang speaks about a particular topic, investors’ ears collectively perk up. 

Accordingly, his recent comments apologizing for his prior view of quantum computing as part of Nvidia’s GTC event have investors rethinking how they should model out the growth and adoption metrics for the quantum computing industry.

Indeed, Nvidia appears to believe in quantum’s future, and the company’s focus on entering this space could be the pivot many investors and traders are looking to as the green light to buy. But the commercialization timeline for quantum computers has always been the issue. And despite various impressive results seen with quantum chips in a laboratory environment, it’s still unclear whether we will indeed see mass adoption a year or two from now, as some companies have suggested is possible.

Rigetti remains on the cutting edge of this nascent industry, and as such, probably deserves its elevated multiple. That said, given how fast shares of the company climbed heading into January, it’s not entirely surprising to see that the stock has cooled off.

What Do the Fundamentals Say?

Rigetti Computing, and really any company operating in the quantum computing field for that matter, is expensive. This stock is currently trading at a forward price-sales multiple of nearly 260 times. That’s rare and suggests that the market believes that when this industry really does take off, Rigetti has a shot of capturing significant share.

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Of course, the timing of prospective revenue, earnings and ultimately, cash flows, remains very uncertain. This lack of clarity is what is hampering Rigetti’s upside potential right now.

Rigetti and its peer group are likely to remain unprofitable for some time. However, I do think it’s worth noting that these stocks will likely trade on news flow tied to any sort of product development and commercialization announcements in the coming quarter. It’s predicting such announcements, and getting ahead of what could be a flood of capital in this space, that is the hard part. 

So far, Rigetti has been a timing story, and its multiple appears to indicate some rather impressive potential upside if the company can hit the ground running. 

So, Where Is Sentiment Heading?

Analysts covering Rigetti appear to be holding steady in their view that there is more upside potential than downside risk, at least for now. 

The current consensus price target for RGTI stock still sits at $14.80 per share, which implies roughly 75% upside from here. 

That said, if adoption doesn’t materialize as expected, it’s hard to know whether this stock will end the year higher or lower from here. Right now, I’m on the fence, and I’ll happily watch this stock from the sidelines. 

On the date of publication, Chris MacDonald did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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