TLDR:
- Rigetti Computing stock jumped 21% last week after selection for DARPA’s Quantum Benchmarking Initiative
- Wall Street analysts rate RGTI a “Strong Buy” with average price target of $14.80 (62% upside potential)
- Strategic $35 million investment from Quanta Computer includes share purchase at premium price of $11.59
- RGTI outperformed both market and semiconductor industry returns over the past year
- Company projects revenue growth of 39.2% per year despite current unprofitability
Rigetti Computing stock has seen a dramatic rise, jumping 21% last week following news of its selection for a key government quantum computing initiative. The price surge came after the U.S. Defense Advanced Research Projects Agency (DARPA) chose Rigetti for its Quantum Benchmarking Initiative.
This selection moves Rigetti to “Stage A” which involves assessment of their utility-scale quantum computer concept. The company has partnered with Riverlane to support this effort.
The stock’s weekly gain substantially outpaced the broader market, which rose about 5% during the same period. Investors appear to be responding positively to Rigetti’s growing position in quantum computing.
Strategic Partnership Boosts Outlook
Rigetti recently secured a major $35 million strategic investment from tech giant Quanta Computer. This deal includes Quanta purchasing RGTI shares at $11.59 per share, a premium to market prices.
The partnership aims to inject over $100 million into developing and commercializing superconducting quantum computing technology over the next five years. This collaboration allows both companies to combine their strengths in this emerging field.
Rigetti believes this partnership will help advance their quantum computing roadmap. The investment represents a strong vote of confidence in Rigetti’s technology and market position.
Analysts note that the quantum computing market is expected to grow rapidly. Industry projections suggest annual revenues could reach between $1 billion and $2 billion by 2030.
Strong Analyst Support
Wall Street has taken a bullish stance on RGTI stock. According to reports, the company has received a “Strong Buy” consensus rating, with six Buy recommendations in the past three months.
The average analyst price target stands at $14.80, suggesting a potential upside of 62% from current levels. This optimistic outlook reflects growing confidence in Rigetti’s business model and market opportunities.
Alliance Global Partners analyst Brian Kinstlinger has been particularly bullish. He reiterated his Buy rating on the stock, predicting an upside of over 75%.
The company’s shares trade well below the consensus analyst price target of $15.00. This suggests potential for upward movement, though investors should be aware of price volatility in this sector.
Rigetti is part of the Russell 2000 index, which tracks 2,000 U.S. small-cap stocks. Its inclusion in this benchmark provides additional visibility for the company.
Technology and Business Model
Rigetti Computing designs and builds superconducting quantum processors. The company offers access to these processors through its cloud platform called Forest.
As a full-stack provider, Rigetti develops both the quantum hardware and the software tools needed to program and operate these systems. Their technology finds applications in various fields including finance, pharmaceuticals, and defense.
Despite showing promise, Rigetti currently operates at a loss. However, revenue growth forecasts are strong, with projections of 39.2% annual growth.
The company has four investment weaknesses identified in analysis reports. Prospective investors should review these concerns as part of their due diligence.
Over the past year, Rigetti Computing has delivered exceptional shareholder returns. The company’s one-year return has exceeded both the U.S. market average of 3.6% and the semiconductor industry average of 3.8%.
This performance positions Rigetti favorably in current market conditions. It highlights the company’s growth potential and market traction in the quantum computing sector.
The company’s recent selection for the DARPA initiative, combined with the Quanta partnership, may positively impact future revenue and earnings. These developments provide momentum for Rigetti’s ambitious growth targets.
Though profitability remains a distant goal, the company’s strategic positioning in quantum computing gives it unique market advantages as this technology continues to develop.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
