Considering the Potential Value of Rigetti Computing Shares Selling Below $15 Dollars: A Worthy Investment?
In the rapidly evolving world of technology, Rigetti Computing (RGTI) has been making waves as a prominent player in the burgeoning quantum computing sector. With artificial intelligence (AI) having driven the stock market's growth for several years, quantum computing is now emerging as a new layer in the AI infrastructure.
However, Rigetti Computing's stock has faced turbulence, with a nosedive in January following comments by Nvidia CEO Jensen Huang suggesting that quantum computing's usefulness is several years away. Despite this, Rigetti's shares have rebounded from low points earlier this year but have mostly traded sideways over the last several months.
At the current moment, Rigetti Computing's shares are trading below $15, and the company's market capitalization stands at $4.2 billion, a fraction of the tens to hundreds of billions commanded by the AI industry's biggest developers like Nvidia. This discrepancy in valuation is reflected in Rigetti's lower price-to-sales (P/S) multiple, which, at north of 320, is in a completely separate universe compared to the AI industry's biggest developers.
The quantum computing market is expected to reach over $22 billion globally by 2032 as commercial deployments accelerate, according to recent reports. More broadly, the quantum technology market, which includes quantum computing along with other quantum technologies, could reach a valuation of $173 billion by 2040. Significant value from quantum computing is anticipated in industries such as chemicals, pharmaceuticals/life sciences, financial services, and transportation/mobility, with an economic impact potentially reaching $2 trillion by 2035.
Rigetti Computing is actively commercializing quantum computing, including partnerships to speed market adoption. However, the quantum computing sector—including Rigetti—remains much smaller in revenue and market size compared to AI leaders. McKinsey’s 2024 data notes quantum computing companies collectively generated around $650 million to $750 million in revenue in 2024, expected to surpass $1 billion in 2025.
In contrast, the AI industry’s biggest developers such as Nvidia, which is pivotal in the AI chip market, have much larger market caps and higher revenue multiples. For example, Nvidia, a leading AI chipmaker, commands a very high market capitalization and typically trades on significantly higher P/S multiples reflecting the booming AI market demand.
In summary, Rigetti operates in a much smaller, emerging market with lower valuations and multiples compared to the mature, high-growth AI industry players. As the quantum computing market continues to grow and mature, it will be interesting to see how Rigetti Computing's stock performs in the coming years.
- Rigetti Computing's focus on quantum computing, a sector expected to reach over $22 billion globally by 2032, indicates a potential investment avenue in the finance realm, especially considering the anticipated value in industries like finance, chemicals, and transportation.
- Despite facing turbulence in the stock market, Rigetti Computing's lower price-to-sales multiple, when compared to AI industry's biggest developers like Nvidia, presents an intriguing opportunity for investors seeking to tap into the emerging quantum computing market.
- As artificial intelligence and its associated markets continue to thrive, the integration of advanced technologies like artificial intelligence and quantum computing in finance and investing sectors could potentially revolutionize the financial landscape, offering significant returns in the long run.
