Rigetti Computing (RGTI -8.84%) is one of the most popular quantum computing pure-play stocks. It's solely focused on making quantum computing commercially relevant, and if it fails at this goal, the stock will become worthless. On the flip side, Rigetti is a very small company, so if it succeeds, the stock has a ton of room to run. This high-risk, high-reward approach may not suit all investors, but there's nothing wrong with it as long as you manage your position sizing.
Because Rigetti is a highly speculative stock, it's also quite volatile, so investors will need to be patient and hold through some jarring movements. Right now, it's valued around $15 per share, but with its strong momentum, can it hit $25 per share by the end of 2025?
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2030 is a key year for quantum computing
If the stock were to increase from $15 to $25, that would result in a quick 66% gain for investors over a short time frame. That's a nice portfolio boost, but how realistic is it?
Rigetti Computing is still working toward commercial viability, although it has several products available today for clients to run quantum computing workloads on. Its Novera QPU (quantum processing unit) is a 9-qubit device that represents the best Rigetti has to offer clients today. It's constantly making upgrades and improvements to this QPU, and also has a full stack of other computing components available for deployment and use.
However, it will likely be some time before quantum computing is deployed on a wide scale. Most companies point toward 2030 as a turning point, and Rigetti is no exception. Before 2030, the annual market opportunity is expected to be between $1 billion and $2 billion annually, primarily driven by research institutions. After that, the annual market opportunity is projected to be between $15 billion and $30 billion annually, which is a huge potential market for Rigetti to serve.
The problem is, Rigetti isn't the only company pursuing this market opportunity.
Many top competitors are in the same field as Rigetti Computing
In addition to Rigetti, many quantum computing start-ups are pursuing the same goal. They're also competing against established tech players with massive cash flows to fund quantum computing research. Quantum computing is ripe with competition, so Rigetti will have its work cut out for it.
Compared to other quantum computing pure plays, I'm not as bullish on Rigetti Computing because of the path it took. There are a few different quantum computing techniques out there, but the most popular by far is superconducting, which is the path that Rigetti took alongside many of the largest tech competitors.
Every technology has its benefits and drawbacks, with superconducting being fantastic for fast processing speeds. But it comes at a cost: The particles used for quantum computing must be cooled to near absolute zero. This is an expensive proposition, and can be a limiting factor when trying to capture this market opportunity. There's a possibility that Rigetti could easily be outspent in this race and fall to the wayside, which concerns me about its future. However, it could just as easily outperform others in the superconducting realm and become the market leader.
It's impossible to know at this point, so any stock movement is just speculation. As a result, it's possible that Rigetti could reach $25 per share by the end of 2025 based on hype alone or if it announces a new contract. It could also just as easily take a tumble, and investors need to be prepared for all outcomes.
Rigetti Computing is a risky stock, but it could work out in the end. Therefore, investors need to know their risk tolerance and size the position appropriately. If you can do that along with buying and holding the stock for several years (likely until 2030), then Rigetti could be a solid long-shot investment pick. However, I prefer other quantum computing pure plays that are taking a different approach than Rigetti, as that differentiating factor helps put some distance between them and the large quantum computing competitors.
