Is it advantageous to invest in Rigetti Computing's shares currently?
In the rapidly evolving world of quantum computing, Rigetti Computing continues to make strides, recently unveiling the Cepheus-1-36Q, the largest multi-chip quantum machine in the industry. This development comes amidst a challenging quarter for the company, as reported in its Q2 financials.
The Cepheus-1-36Q boasts a calculation error rate that is half that of its predecessor, marking a significant leap in accuracy. However, Rigetti's Q2 financials paint a slightly different picture. The company's revenue dipped to $1.8 million, a stark contrast from the $3.1 million recorded in 2024. The cost of revenue and operating expenses both increased, resulting in an operating loss of $19.9 million.
Rigetti's stock is currently trading at -2.14%, reflecting a potentially high P/S multiple compared to its competitors IonQ and D-Wave Quantum. This suggests that shares in the company may be expensive, and it may be prudent to wait for a potential price drop before considering an investment.
It's important to note that the path to quantum advantage for Rigetti, like many other players in the field, remains uncertain due to intense competition. Key competitors include IonQ, D-Wave Quantum, IBM, Microsoft, and European company IQM Quantum Computers. Notable recent progress includes Rigetti achieving 99.5% two-qubit gate fidelity on its 36-qubit system, IonQ's merger with Oxford Ionics, D-Wave's 42% revenue growth and processor innovations with NASA, and IQM raising $320 million to expand its on-premises and cloud quantum computing offerings.
Google, another formidable competitor, has made significant strides, developing a quantum chip capable of completing a complex computation in five minutes that would take centuries with today's fastest supercomputers.
Despite the challenges, Rigetti has managed to secure substantial funds, with $571.6 million in cash, cash equivalents, and available-for-sale investments, and no debt on its balance sheet. The company is also collaborating with Montana State University for quantum computing research and experimentation.
Investors considering Rigetti shares should be aware of the high risk associated with this sector. The stock's 52wk range is $0.66 - $21.42, and its average volume is 44,522,309. Despite the recent surge, with Rigetti Computing's shares increasing over 1,500% in the past 12 months through Aug. 27, only investors with a high risk tolerance should consider buying shares in the company.
Rigetti's CEO, Dr. Subodh Kulkarni, estimates that the company is about four years away from achieving quantum advantage. As the race for quantum supremacy continues, it will be interesting to see how Rigetti navigates this complex landscape.
