The quantum computing stocks have been on a wild roller-coaster ride over the past two months. Rigetti Computing (RGTI 3.44%) is no exception, as it rose nearly 250% from Sept. 1 to its peak, before falling to more than 35% off its all-time high. However, it rebounded after the U.S. government indicated it would be interested in investing in quantum computing technology, as it sees as an important technological advantage that the U.S. must have.
All of this whiplash is meaningless for long-term investors. While it may affect the entry price slightly, we don't have our eyes on what happens in the next year or even the year after that. The real value in Rigetti Computing stock will be realized over the next decade, with clarity coming to investors about which quantum computing companies will be the ultimate winners, likely between 2030 and 2035.
Where could Rigetti's stock be a decade from now? Let's find out.
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The quantum computing trend is in its infancy
There are no commercially viable quantum computers right now. Every quantum computing unit that has been sold or developed is being used for research purposes. Most companies point to 2030 as the year that will change, which is still a long way off. Rigetti Computing is no exception, but it shows some signs of life even today.
One piece of news Rigetti Computing announced over the past few weeks were two sales of its Novera quantum computing system. Rigetti sold a system to an Asian manufacturing firm as well as a California-based startup. The total value for these systems wasn't all that expensive, totaling $5.7 million. Rigetti will have to sell a ton more of these systems to become a viable company, but that's not the point.
NASDAQ: RGTI
Key Data Points
What investors should be focusing on is that demand for early-stage quantum computers is rising, and that two businesses selected Rigetti Computing's option over everything else that is currently available. This may indicate that Rigetti is starting to develop a first-mover advantage, although there's no guarantee that it will turn into a long-term advantage.
Quantum computing is full of strong competition, including motivated pure-play companies like Rigetti Computing as well as deep-pocketed ones like Alphabet. Time will tell how Rigetti fares against the competition, but they all have one thing in common: They all predict that quantum computing will become viable in 2030. But what kind of market cap can investors expect these companies to be a decade from now?
Rigetti Computing expects a modest-sized market to appear
Prior to 2030, Rigetti Computing estimates that the annual value for the quantum computing market totals between $1 billion and $2 billion. That's not a very big market, but as expected, Rigetti believes it will dramatically expand following 2030. Between 2030 and 2040, it expects an industry worth $15 billion to $30 billion to appear. I don't think that's an overstatement of the opportunity, as Nvidia sold $41 billion worth of data center graphics processing units (GPUs) during its second quarter of fiscal 2026.
With the quantum computing market expected to be only a fraction of the accelerated computing market, I think this lends some credence to this projection, as Rigetti isn't expecting that every traditional computing device will be replaced by a quantum computing one.
If Rigetti can capture a 25% market share out of the $30 billion it expects by 2035 and achieve a 30% profit margin, Rigetti will produce $7.5 billion in revenue and $2.25 billion in profits. At a 30 times earnings multiple, that would give Rigetti Computing a market cap of $67.5 billion.
At today's share count, that would value the stock at $208 per share. That's a strong return over the next decade, but it requires a few things to happen.
First, the quantum computing market Rigetti expects to be there has to occur, and there's no guarantee it will happen. Second, there's no guarantee that Rigetti's quantum computing technology ends up being the best option, and it could lose to one of many competitors. This could send the shares to zero, making it a high-risk, high-reward stock.
A lot has to go right for Rigetti to achieve these returns, so I will probably avoid investing until more clarity comes into the quantum computing trend. I may come to regret that decision, but I just don't have the risk tolerance for picking an early-stage company like Rigetti.
