Up 2,400%, Should You Buy Rigetti Computing Right Now?

There's nary denying that immoderate quantum computing stocks person delivered astonishing returns for investors during the past fewer years. And Rigetti Computing (NASDAQ: RGTI) is simply a standout adjacent among immoderate of the astir awesome gains, with the banal rising much than 2,400% since January 2023.

But arsenic we each know, each that glitters is not gold. There are immoderate precise bully reasons to debar Rigetti close now, adjacent arsenic its banal terms surges. Here are 3 of them.

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One glaring contented with buying Rigetti banal close present is that the institution has virtually nary sales. Fine, to beryllium fair, it had $1.9 cardinal successful gross successful the archetypal quarter. But that was down 18% from the year-ago quarter. Falling income for a alleged maturation banal is simply a large reddish flag.

With specified debased sales, it shouldn't travel arsenic a astonishment that Rigetti isn't profitable. The institution reported a mostly accepted accounting principles (GAAP) nett nonaccomplishment of $201 cardinal successful Q3.

So, erstwhile tin investors expect Rigetti to crook things astir and commencement generating meaningful revenue? Not until 3 to 5 years from now. That estimation is consecutive from Rigetti Chief Executive Officer Subodh Kulkarni successful comments from the company's Q1 2025 net call:

Really, the extremity should beryllium to get a quantum machine to Narrow Quantum Advantage. And that's truly erstwhile commercialized income and income successful wide commencement making sense. And we are talking astatine slightest 3 years from now, possibly 4 to 5 years from now.

That's a heck of a agelong clip for investors to hold for meaningful gross to materialize.

Even if you're a diligent capitalist and you don't caput waiting for imaginable income to materialize, it's important to constituent retired that buying Rigetti close present portion gross is hardly registering means you're paying an highly precocious premium for the stock.

Rigetti's shares person a price-to-sales (P/S) ratio of 824 right now, which is acold much costly than the mean tech stocks P/S ratio of conscionable 9. It's not uncommon for tech maturation stocks to beryllium expensive, but their precocious outgo astir ever comes paired with fast-growing sales. Rigetti doesn't person that, which means investors are overpaying for virtually thing close now.

Adding to the supra 2 reasons investors should debar Rigetti is the information that quantum computing itself is simply a precise speculative exertion and is successful nary mode guaranteed to present connected its promises -- oregon successful the clip framework that companies anticipation it will.