Shares of Rigetting Computing (RGTI +19.94%) shot up 47% this week, according to data from S&P Global Market Intelligence. The quantum computing start-up is soaring after the United States government announced a $2 billion investment fund into quantum research, of which Rigetti is recieving $100 million.
The stock remains down 53% from all-time highs. Here's why Rigetti Computing rebounded this week, and whether the stock is a buy today.
NASDAQ: RGTI
Key Data Points
State capitalism in quantum
On May 21st, the United States Department of Commerce announced a series of investments in companies involved in quantum computing. Rigetti Computing will receive $100 million in funding over the next three years to support its superconducting quantum computing research, with the government now owning an equity stake in the business.
Quantum computing promises to revolutionize computing power if it can be commercialized. However, these businesses have struggled to move from a science project to a viable business, with Rigetti reporting revenue of just $4.4 million last quarter and large operating losses.
Image source: Getty Images.
Time to get in on the Rigetti Computing party?
This new round of funding will give Rigetti Computing significant cash on its balance sheet, which it can use to fund research for many years. Investors should not believe this guarantees the stock will do well over the long-term, though.
Rigetti has a market cap of $8.75 billion with close to zero in revenue. It is burning cash every quarter and diluting shareholders through capital raises. Unless the company is one of the first to solve the potential miracle that is quantum computing commercialization -- which hundreds of research labs are vying for -- then the stock is not going to do well from here.
Don't buy Rigetti Computing stock after this week's pop.
