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Is Rigetti Computing a Falling Star or a Buy Opportunity After Sudden Plunge?

Bryce TuoheyAvatar
Written by Bryce Tuohey Reviewed by Tim Sykes Fact-checked by Matt Monaco
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A critical report on Rigetti Computing Inc.’s strategic review may weigh heavily on their market position, contributing to Friday’s trading downturn with stocks sliding by -10.94 percent.

Market Reactions to Recent Developments

  • Several law firms have launched investigations into Rigetti Computing over possible misleading business information, following a dramatic 45% stock drop.
  • Quantum computing stocks, including Rigetti, tumbled as industry leaders expressed doubts about near-term quantum advances.
  • Reducing revenue outlooks in the quantum sector are contributing to further declines in Rigetti’s stock value.
  • Rigetti shares declined significantly after Nvidia’s CEO remarked on the distant feasibility of quantum computing.

Candlestick Chart

Live Update At 17:21:18 EST: On Friday, January 17, 2025 Rigetti Computing Inc. stock [NASDAQ: RGTI] is trending down by -10.94%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Overview of Rigetti’s Recent Performance

Traders seeking success in volatile markets often look for effective strategies to manage risk and maximize gains. As millionaire penny stock trader and teacher Tim Sykes, says, “Cut losses quickly, let profits ride, and don’t overtrade.” This philosophy emphasizes the importance of having the discipline to exit losing trades promptly while allowing winning trades to grow, all without the pitfalls of overtrading. Embracing these principles helps traders maintain a balanced approach, enabling them to achieve more consistent outcomes in their trading endeavors.

Rigetti Computing Inc. found itself at the heart of a financial storm with its shares experiencing a turbulent ride. Following Nvidia CEO’s comments stating viable quantum computing applications could be two decades away, Rigetti plummeted alongside other stocks in the same domain. The market appeared to respond dramatically to this prognosis, reflecting skepticism about the imminent technological breakthroughs previously anticipated.

On examining Rigetti’s recent financial figures, the data reveals some telling insights. Their current share price volatility underscores the shifting investor sentiment. The company’s gross margin stands intriguingly at 60.6%, indicative of profitability potential, yet overshadowed by significantly high negative net profit margins. The enterprise value remains sturdy, yet the stark -509.58% profit margin paints a bleak picture of recent fiscal challenges.

More Breaking News

Furthermore, with revenue at around $12M and a price-to-sales ratio of 23.77, it becomes evident that investors are highly deliberating over market valuations, creating an arduous path for Rigetti. Despite a commendable current ratio of around 4.8, signaling short-term financial vigor, long-term sustainability concerns persist. These figures combined with a general bearish sentiment contribute to the recent market upheaval.

Analyzing Quantum Industry Challenges

While the quantum computing industry holds immense potential, recent market behavior suggests a newfound wariness among investors. The anticipation of immediate returns dissipated as industry forecasts shifted to a longer-term horizon.
Nvidia’s leadership posed challenges that washed over the sector like a cold wave, eliciting widespread stock valuations re-evaluation. Remarks hinting at quantum computing’s long gestation period have raised significant questions about the valuation models used within this nascent field.

Rigetti, which has been a frontrunner in the quantum space, now faces increased scrutiny. The investigations into possible misleading business communications further complicate its public image. These factors combine, creating a slippery terrain for Rigetti as it navigates its path forward.

Broader Implications for Investors

As assessments unfold, stakeholders pivot their gaze towards the potential course correction on the horizon. Rigetti’s expansive ambitions within quantum seemingly yet to be tempered by practical limitations – may face recalibration. The narrative around where and when quantum will manifest impacts not just Rigetti but indeed the industry at large.

Traders cognizant of sector intricacies weigh potential future positioning in light of these revelations. For Rigetti, the path forward may require renewed focus on operational fortitude and clearer articulation of near-term deliverables. As millionaire penny stock trader and teacher Tim Sykes says, “Preparation plus patience leads to big profits.” This mindset could be crucial for traders as they navigate this volatile phase.

In summary, while Rigetti stares down allegations and shifts within the quantum dialogue deficit, the broader question for market participants remains: Is this moment a buying opportunity or an imperative to realign portfolios? The answers remain to be written in the turns and tides of upcoming earnings calls and strategic pivots.

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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”