RGTI Stock: Path To 10x Growth

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Rigetti Computing’s stock jumped 30% on July 16 after reaching 99.5% gate fidelity on its 36-qubit modular system—halving error rates compared to its earlier 84-qubit chip. This achievement confirms their chiplet-based architecture as a scalable option for practical quantum computing. Even though RGTI stock has already seen an impressive 1,300% increase over the past twelve months, the question persists: what elements could propel the stock to another tenfold increase?

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10x Growth Drivers

• Modular Architecture Advantage: In contrast to competitors that utilize monolithic processors, Rigetti’s chiplet strategy addresses the main scaling issue in quantum computing. Their capability to maintain 99.5% fidelity while scaling through interconnected modules establishes them as the frontrunner in practical, large-scale quantum systems.
• Strategic Manufacturing Partnership: The $100M investment commitment from Rigetti and Quanta over five years, along with Quanta’s additional $35M funding, offers manufacturing expertise and funding to facilitate large-scale commercialization.
• Government Validation: Selection by DARPA’s QBI program and consortium leadership enhances credibility and secures stable revenue streams for utility-scale quantum advancements by 2033.
• Commercial Market Timing: As quantum computing shifts from the research phase to commercial applications, Rigetti’s advanced architecture and cloud-based services uniquely position them to capture disproportionate market share.

Risk Factors

• Financial Reality: The company is confronted with substantial financial hurdles, with $10.8M revenue anticipated in 2024 against $68.5M operational expenses. Q1 2025 revenue fell by 52% year-over-year to $1.47M, emphasizing a heavy dependence on unstable government contracts.
• Valuation Risk: The company’s inflated valuations may offer insufficient protection against market downturns. Shifts in market sentiment could easily cause significant volatility. While investors evaluate quantum stocks based on anticipated future growth, RGTI, for instance, is currently trading at approximately 400 times its trailing revenues, suggesting a potentially inflated valuation.
• Cash Burn: An unsustainable spending rate necessitates rapid revenue growth.
• Execution Risk: The need to successfully implement the scaling roadmap and demonstrate a quantum advantage.
• Competition: Well-capitalized technology giants and alternative quantum methodologies, all vying for market share in the quantum computing arena.

Historical Examples of 10x Growth

NVIDIA’s AI Revolution (2016-2024)

NVIDIA provides the most relevant comparison for QBTS’s potential growth path. From 2016 to 2024, NVIDIA stock soared from about $8 to over $130 (adjusted for stock splits), representing a 16x increase. This growth occurred as NVIDIA transformed from a gaming graphics company to a fundamental part of AI infrastructure. Likewise, D-Wave may benefit from the growing quantum computing infrastructure market. Additionally, see – NVDA Stock To $200?

Biotech Breakthroughs

Moderna’s creation of a COVID-19 vaccine propelled its stock from $20 to beyond $400 in 2020-2021, demonstrating how revolutionary applications can result in explosive growth. D-Wave’s quantum optimization solutions could similarly revolutionize industries once they achieve commercial success.

The Verdict

Rigetti stands as a high-risk, high-reward prospect at the commercial inflection point of quantum computing. Their breakthrough in modular architecture, in tandem with manufacturing partnerships and government endorsement, opens up various avenues for 10x growth.

Success is contingent on executing the scaling strategy, proving a commercial quantum advantage, and achieving revenue growth to validate their substantial current valuation. For those willing to take risks, Rigetti offers exposure to potentially transformative technology with distinct competitive benefits at a pivotal market transition.

While considerable risks exist, the potential for transformative influence across varied industries justifies a premium valuation for investors with the right risk tolerance and long-term investment outlook. We emphasize the significant risks associated with this investment; therefore, investors should carefully assess these risks or explore professionally managed alternatives, such as the Trefis High Quality (HQ) Portfolio featuring 30 stocks that have consistently outperformed the S&P 500 over the last four years. Why is this so? Collectively, HQ Portfolio stocks have generated higher returns with lesser risk compared to the benchmark index, experiencing reduced volatility, as evidenced by HQ Portfolio performance metrics.