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Can Rigetti’s Quantum Leap Sustain its Market Momentum?

Matt MonacoAvatar
Written by Matt Monaco Reviewed by Jack Kellogg Fact-checked by Tim Sykes
Can Rigetti’s Quantum Leap Sustain its Market Momentum? Thumbnail

Rigetti Computing Inc.’s stock sees an uptick, driven by positive sentiment from recent headlines about advancements in quantum computing technology and strategic partnerships that bolster its growth potential. On Tuesday, Rigetti Computing Inc.’s stocks have been trading up by 4.64 percent.

A Surge in Momentum

  • Alliance Global Partners has boosted the price target for Rigetti Computing to $5.50, holding a Buy status following the company’s $100M market offering, elevating its stakes in the quantum computing sector.
  • AWS’s new Quantum Embark program announcement spurred a 45% uplift in Rigetti shares as investor enthusiasm ignited for this frontier tech.
  • Increased price targets and positive forecasts from B. Riley further fueled confidence, raising projections from $3.50 to $4 while affirming a Buy recommendation.
  • Rigetti’s announcement of a significant share offering at $2 per share plans to raise $100M for working capital, pending closure, underscores their aggressive capital strategy.

Candlestick Chart

Live Update At 17:02:48 EST: On Tuesday, December 03, 2024 Rigetti Computing Inc. stock [NASDAQ: RGTI] is trending up by 4.64%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Quick Overview of Rigetti’s Recent Financials

As millionaire penny stock trader and teacher Tim Sykes, says, “There is always another play around the corner; don’t chase just because you feel FOMO.” In the fast-paced world of trading, this advice is crucial. Many traders fall into the trap of making impulsive decisions driven by the fear of missing out. It’s vital to remember that patience and calculated moves often yield more success than rash decisions driven by panic. By staying disciplined and focused, traders can avoid unnecessary risks and make smarter choices for long-term success.

Rigetti Computing has showcased a remarkable trajectory of growth amidst the burgeoning quantum tech landscape. Despite evident volatility, the trailing days highlight intriguing financial movements. Reviewing the trade data, we observe that Rigetti’s stock price danced between peaks and troughs, offering a volatile yet promising investment opportunity.

The company reported revenue of $12.01M, yet profitability metrics like an EBIT margin of -489.4 reveal significant challenges. With a gross margin of 60.6, Rigetti shows promise but still battles high costs and operational hurdles. Their financial strength, underlined by a current ratio of 4.8, suggests stability within their working capital framework.

More Breaking News

Rigetti’s efforts to secure another $100M through share offerings are vital in maintaining liquidity, potentially sustaining them until 2026. However, their price-to-sales ratio of 23.77 indicates an overvaluation, accentuating the risk inherent in investing at this juncture.

Headlines Drive Stock Action

Amazon’s announcement regarding its Quantum Embark Program breathed new life into the sector, propelling Rigetti’s stock upwards. An impressive 45% spike in premarket trading mirrored the excitement around this technological frontier. Investors were evidently drawn to Rigetti, anticipating pivotal advancements and industry-defining collaborations.

This enthusiasm was further amplified as analysts like Alliance Global Partners and B. Riley adjusted their price targets for Rigetti, drawing attention to the potential undervaluation at previous levels. Their strategic forecast alignments denote confidence in Rigetti’s market positioning and capacity to capitalize on quantum advancements.

Meanwhile, the company’s $100M equity offering at $2 per share has triggered discussions about liquidity and expansion. The inflexion of capital is designed to support growth and strategic initiatives, while also addressing potential liquidity crunch scenarios.

Implications for the Market

Rigetti’s recent financial maneuvers depict a double-edged sword scenario. The company is pacing a precarious balance between innovation-led growth and capital-intensive dynamics. As they align their strategies around capital influx and quantum progressions, the real challenge lies in converting these investments into profitable tech breakthroughs. As millionaire penny stock trader and teacher Tim Sykes, says, “You must adapt to the market; the market will not adapt to you.” This underscores the importance for Rigetti to be agile in its approach amidst fluctuating market conditions.

The road ahead for Rigetti is marked by opportunities to redefine computational paradigms. Yet, the high operational costs, reflected in bearish profit margins, could bottleneck its growth efficiency. Traders remain optimistic, influenced by bullish analyst sentiments and strategic funding initiatives, but caution is warranted.

The coming quarters will test Rigetti’s resolve to transcend their niche leadership into a mainstream quantum force. A tangible demonstration of their technological prowess may be imperative to maintain current momentum and fortify trader confidence, ultimately establishing Rigetti as a stalwart of next-generation computing.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”