The shine has come off some quantum computing stocks after a rush to own a piece of the potential game-changing technology last year. Rigetti Computing (RGTI 0.97%) was one of the quantum darlings, but shares are now about 75% off their highs from last fall.
The plunge continued this week, with Rigetti shares down 15.4% as of Friday morning, according to data provided by S&P Global Market Intelligence.
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Wall Street's thumbs down
This week's drop came after reports that TD Cowen analyst Krish Sinkar downgraded Rigetti stock. Sinkar thinks investors have gotten ahead of themselves with Rigetti. He also believes forward estimates for 2027 are too aggressive.
That's mainly because revenue potential could be lower than many believe. Rigetti reported only $1.9 million in third-quarter revenue, while investors are valuing the company at a market cap of nearly $5 billion. That's down from over $18 billion last fall, but it's still lofty given the fundamentals.
NASDAQ: RGTI
Key Data Points
Rigetti management even believes most demand, and therefore value, for quantum computing will materialize after 2030. Rigetti stock is starting to reflect the view that returns could still be years away. Quantum computing may ultimately give businesses, governments, and universities a much more powerful platform. But investors likely will have plenty of time to pick winners and losers in the coming years. Rigetti stock is now declining from the overexuberance seen last year.
