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Why Is Rigetti Computing’s Stock Tumbling? Key Insights and What Lies Ahead

Jack KelloggAvatar
Written by Jack Kellogg Reviewed by Ellis Hobbs Fact-checked by Matt Monaco
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Despite Rigetti Computing Inc.’s contract win with the U.S. Department of Energy and its strategic leadership enhancement with new board members, the company’s stock is under pressure, likely influenced by broader market concerns or investor caution. On Wednesday, Rigetti Computing Inc.’s stocks have been trading down by -3.51 percent.

Recent Developments Surrounding Rigetti Computing

  • An investigation into Rigetti Computing, Inc. is underway, potentially related to claims of misleading business information. This was sparked by Nvidia CEO’s remarks on the distant practical application of quantum computers.
  • Reports suggest Rigetti’s stock has plunged heavily following Nvidia’s skepticism, with a staggering drop of 45% recorded in just one day.
  • Securities fraud investigations by legal firms emphasize concerns over possible false statements by Rigetti, which have reportedly resulted in significant stock price drops.
  • Recent trading sessions have seen Rigetti shares display volatility, with numerous reversals and further declines nearing 5%.
  • The distressed tech sector was further hit after Mark Zuckerberg echoed doubts about quantum computing’s near-term potential, causing a dip across similar stocks.

Candlestick Chart

Live Update At 14:32:11 EST: On Wednesday, January 22, 2025 Rigetti Computing Inc. stock [NASDAQ: RGTI] is trending down by -3.51%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Rigetti Computing: An Overview of Earnings and Financial Health

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.” This advice is particularly important for traders who often find themselves swept up in the excitement and fear of missing out when they spot a potential opportunity. Trading requires patience and strategic thinking, not impulsive decisions driven by emotions. Recognizing that another opportunity will present itself allows traders to make more calculated decisions and avoid unnecessary risks.

Rigetti Computing has been through a tumultuous time, reflecting the precarious state of the quantum computing industry. The financial records paint a trying picture. Facing mounting losses, the company trudged through with total revenue hovering just above $12M last quarter. Operating expenses overshadowed the revenue, reaching nearly $19.7M, highlighting the substantial strain on their balance sheet.

Their net losses continued, reporting a negative $14.8M in income. Despite some innovations in quantum tech, practical applications seem years away, according to industry experts, leading to skepticism about investing in RGTI.

More Breaking News

While Rigetti holds significant cash reserves, the overwhelming operating expenditures and ongoing legal actions leave investors anxious. Their financial positioning suffers under negative earnings before interest, taxes, depreciation, and amortization margins. Such negative margins reflect deep operational inefficiencies.

How the News Affects RGTI Stock

The skepticism from both Nvidia’s CEO and Facebook’s Mark Zuckerberg have profoundly impacted Rigetti’s stock. The ripple effects have seen panic among investors, driving prices down with frequent variations in the stock’s value. Executives’ comments point to a demystified timeline for quantum computing, which in turn sends alarm bells ringing for Rigetti’s future.

Adding to the turmoil, legal investigations revolve around accusations of misleading shareholders. These doubts further dent market confidence. With such influential voices adding skepticism, the industry that once promised a breakthrough future sees its validity reassessed, affecting Rigetti’s market performance severely.

These developments suggest a fractious path ahead. The market is deciphering whether this is a momentary setback or if it’s the harsh reality of over-valuation and speculative excitement meeting hard truths.

Conclusion: Rigetti’s Outlook Amidst Uncertain Times

While some tech devotees continue to value Rigetti’s long-term goals, there’s growing concern over near-term viability. Questing into the promises of quantum computing without near-term deliverables has left traders hesitant. Rigetti faces challenges across legal, financial, and operational spectrums.

Until clearer avenues and concrete advancements illuminate the path forward, caution reigns supreme. Traders keen on Rigetti must weigh current legal and financial pressures against the distant potential of quantum breakthroughs. As millionaire penny stock trader and teacher Tim Sykes says, “Consistency is key in trading; don’t let emotions dictate your trades.” The road to recovery remains shrouded in uncertainty, waiting for clarity amidst the frenetic market shifts that RGTI traders now navigate.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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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”