RGTI Surges 97% YTD: Should You Buy, Hold or Sell the Stock?

Core Viewpoint - Rigetti Computing (RGTI) has significantly outperformed major competitors and the broader technology sector in year-to-date performance, indicating strong market positioning and growth potential in the quantum computing space [1][2]. Year-to-Date Performance - RGTI shares have appreciated by 96.9% year-to-date, compared to Salesforce (28.8%), IBM (38.2%), and Alphabet (20%), while the broader sector has seen a 27.6% increase [1]. - In the Zacks Internet - Software industry, RGTI outperformed with a return of 96.9% against the industry's 31.2% [2]. Expansion of Portfolio - Rigetti's advancements in quantum computing technology are driving growth, with the introduction of a new modular system architecture and plans for a 36-qubit system by mid-2025 and a 100-qubit system by the end of 2025 [5]. - The company achieved a 99.4% median 2-qubit gate fidelity on its 9-qubit chips, which is essential for scaling quantum systems [5]. - The introduction of the Alternating Bias-Assisted Annealing technique enhances the fidelity and performance of quantum processors, supporting multi-chip architecture and scaling efforts [6]. Market Positioning - RGTI's modular chip architecture allows for efficient scaling by linking multiple identical chips, positioning the company to meet increasing market demand for scalable quantum systems [7]. - The quantum computing market is projected to grow at a CAGR of 20.1% from 2024 to 2030, indicating a favorable environment for RGTI's growth [8]. Clientele Expansion - Partnerships with Riverlane, NQCC, and collaborations with NVIDIA and Quantum Machines are significant growth drivers for Rigetti [9]. - Rigetti and Riverlane's development of quantum error correction technology is crucial for improving stability and reliability in quantum computing [10]. - Rigetti's technology is being utilized at the National Quantum Computing Centre in the UK, enhancing its profile in the international quantum research community [12]. Financial Performance - The Zacks Consensus Estimate for fourth-quarter revenues is projected at $2.40 million, reflecting a decline of 28.99% year-over-year [13]. - The consensus for earnings indicates a loss of 8 cents per share, which is an 11.11% increase from the previous year's quarter [14]. - RGTI's forward 12-month Price/Sales ratio is 35.50X, significantly higher than the sector's 3.02X, suggesting that the stock may not be undervalued [17].