Rigetti Computing (RGTI 12.54%) has caught investors' attention. It's one of the few quantum computing companies with its own manufacturing facility, and it's shown it can deliver some impressive technology. If quantum computing delivers on its promise, Rigetti would be one of the names you'd want to own.
NASDAQ: RGTI
Key Data Points
The "when" is important
The company has a market capitalization north of $5.8 billion, yet its sales in the last 12 months total just $7.5 million. That is a serious disconnect. Investors are pricing in a massive amount of future growth and, in my opinion, are too optimistic about the quantum computing's development timeline.
A recent MIT report said that large-scale commercial applications -- the kind that justify multibillion-dollar market caps -- likely remain "far off." Morningstar agrees; its analysis puts general-use quantum computing two decades away.
Image source: Getty Images.
The bottom line for investors
While stranger things have happened, I wouldn't count on a quantum computer from Rigetti or other pure-plays like it coming close to justifying their current valuations for a very long time.
And along the way, the company must continually find funding that will likely be dilutive to shareholders. I think there are better opportunities out there that offer upside without the massive downside risk -- Alphabet would be where I'd put my money.
