Will Investing in Rigetti Computing Shares Be Worthwhile in 2025?
The quantum computing boom promises to conquer intractable computational problems, potentially revolutionizing sectors like medicine and finance. As investors seek a piece of this future, Rigeti Computing (RGTI, -2.92%) emerges as a compelling, albeit high-risk, investment option. The Berkeley-based quantum processor manufacturer has skyrocketed 1,860% over the past half-year, propelled by an industry-wide quantum surge.
Rigeti leads the pack in developing functional quantum computers utilizing superconducting qubits. Operating at frigid temperatures and leveraging established semiconductor manufacturing techniques, these quantum bits deliver significant advantages. The company's most recent feat, the 84-qubit Ankaa-3 system, boasts an impressive 99.5% median 2-qubit gate fidelity – a testament to its technological prowess.
A vital breakthrough, the novel fabrication technique called alternative-bias assisted annealing, empowers precise control over qubit frequencies. This innovation underpins Rigeti's modular chip architecture, a competitive edge. By assembling smaller chips, the company overcomes the challenges of creating a single, massive processor. Recently, 9-qubit chips reached 99.4% fidelity even when connected, signaling promising advancements.
The company plans to construct a 36-qubit system using four connected chips by mid-2025, followed by a 100-plus qubit machine later that year. However, despite these promising advancements, Rigeti trades with a whopping 260x multiple of trailing sales, assuming substantial market share in the maturing quantum era, which experts project may not materialize until the 2030s.
Financial growth prospects appear robust, but challenges remain. A $100 million capital raise last November bolstered Rigeti's finances, providing ample resources to execute its short-term roadmap without requiring further fundraising. The company boasts $192.6 million in cash and investments, enabling a strong financial position.
However, the stock's astronomical valuation leaves room for doubt. Rigeti's revenue projects to reach modest levels of under $16 million in 2025, with substantial ongoing losses.estra finances a formidable competitive landscape. Tech heavyweights such as Alphabet and IBM allocate significant resources to their quantum computing endeavors. Numerous well-funded start-ups struggle for dominance in this nascent field.
Recent partnerships, though, could catalyze Rigeti's growth. Major cloud providers Amazon and Microsoft will provide access to Rigeti's Ankaa-3 system through their platforms, Amazon Braket and Azure, during the first quarter of 2025. This collaboration could exponentially expand Rigeti's technology reach and generate essential revenue streams.
Furthermore, collaboration with Riverlane on quantum error correction constitutes another strategic move. Their real-time, low-latency error correction on the Ankaa-2 system represents a crucial step toward fault-tolerant quantum computing. By executing on this roadmap and meeting its targets, Rigeti positions itself as a potential industry leader in the burgeoning quantum computing space.
Tech-savvy investors intrigued by quantum computing's transformative potential may view Rigeti as an opportunity for direct exposure to the sector. However, given the stock's soaring valuation and numerous uncertainties, any investment in Rigeti should be styled as a speculative wager rather than a core holding. Cautious risk management is essential, as the quantum computing revolution could unveil long-term winners, but identifying them at this early stage calls for both deep conviction and careful deliberation.
Investors who are interested in the potential of the quantum computing boom in the finance sector might consider Rigeti Computing as an investing option, due to its significant advancements in quantum computing technology. Despite Rigeti's promising future, its stock trades with a high multiple of trailing sales, requiring careful consideration and risk management before making an investment.
