Shares of Rigetti Computing (RGTI +1.44%) are sinking on Tuesday, down 8.7% as of 2:46 p.m. ET. The drop comes as the S&P 500 loses 0.7% and the Nasdaq Composite loses 1.5%.
The quantum computing company's stock is continuing its slide after its recent earnings failed to impress investors and as macro concerns about the direction of the economy are leading investors to jump out of risky stocks.
NASDAQ: RGTI
Key Data Points
Rigetti Computing stock drops on weak Q2 and macro jitters
Last week, Rigetti released its Q2 report, revealing that its sales and earnings were down significantly year over year. The company's $1.8 million in revenue was nearly 42% less than last year in the same period, and its net income dropped nearly 220% as the company lost nearly $40 million in the quarter.
While the loss was exacerbated by some one-off accounting charges, the performance still showed how far the company is from justifying its current market cap of nearly $5 billion.
Image source: Getty Images.
Adding to the pain, recent economic data is putting pressure on riskier stocks like Rigetti. The latest jobs report shows the economy may be slowing, while at the same time, inflation numbers came in higher than expected.
Investors should be cautious
The company did share some promising operational updates and leaps in its technological development in its earnings release, but I believe we are likely many, many years, if not decades, away from viable quantum computing. Despite this, Rigetti and other quantum computing companies are reaching multibillion-dollar valuations already. I think there is a major disconnect here, and quantum investors may get burned if the economy does really take a dive.
