Rigetti Computing (RGTI 4.22%) and D-Wave Quantum (QBTS 4.34%) are two stocks that rewarded investors with incredible returns, but even after their recent retreat from their October highs, I think they have a lot further to fall.
Even now, with Rigetti shares trading at $16 and D-Wave at $20, their valuations are disconnected from reality and any business fundamentals, and that could soon be a serious problem for investors.
NASDAQ: RGTI
Key Data Points
By the numbers
Rigetti posted $7.5 million in revenue over the last 12 months. Its market capitalization is over $5.3 billion. D-Wave's valuation may be slightly better, but not by much. The company delivered $24.1 million in sales over the last 12 months, and its market cap is north of $7.2 billion.
Both companies are deeply unprofitable and burning cash every quarter, and the only path to profitability hinges on a massive leap forward in an incredible experimental technology.
Image source: Getty Images.
The bull case comes down to delivering useful quantum computing. But they'll need to do so in a reasonable time frame. Despite what many hope, there's plenty of reason to believe viable quantum computing could be a decade or more away. I don't think 2026 will be kind to either stock. Unless you have a long investing horizon, now is probably a good time to sell, before these stocks' prices fall further.
