In recent months, quantum computing has emerged as a focal point in the investment landscape, generating remarkable returns for a select group of companies within this cutting-edge sector. Rigetti Computing stands out as an exceptional performer, boasting an astonishing 3,700% increase in its stock value over the past year. This surge has captured the attention of prominent investors, with several top hedge funds increasing their positions in the company during the second quarter.
Quantum computing harnesses the unique properties of quantum bits, or qubits, which can represent values beyond the binary system of traditional computing. As a result, these systems are uniquely equipped to tackle complex pattern-finding tasks that are vital for advancements in fields such as medical research, financial modeling, and cryptography. Many experts assert that once quantum technology reaches its full potential, these machines could surpass current supercomputers, solving some of society’s most pressing challenges.
Rigetti is a pioneer in the quantum computing arena. A significant milestone was reached in July when the company’s 36-qubit system achieved a median two-qubit gate fidelity of 99.5%, highlighting its potential for superior performance. Rigetti management is optimistic about the future, targeting the release of a 100-qubit system renowned for its accuracy by the end of 2025.
Government interest in quantum technology appears to be growing. The Air Force Research Laboratory recently awarded Rigetti a substantial $5.8 million contract to aid in the development of a superconducting quantum network, aimed at enhancing data transfer within quantum computing systems. This increased governmental backing may facilitate the path toward commercialization.
B. Riley Financial analyst Craig Ellis has offered a bullish outlook on Rigetti, reiterating a buy rating and setting a price target of $35 per share. Ellis has observed a shift in sentiments among the Department of Energy’s National Laboratories, which now show a greater focus on quantum technology with tangible business applications.
The growing enthusiasm around quantum computing has not gone unnoticed by some of the nation’s wealthiest investors. Citadel Advisers raised its stake in Rigetti by over 50%, accumulating more than 1.2 million shares. Tudor Investment, led by Paul Tudor Jones, purchased over 900,000 shares, and Two Sigma Investments boosted its position by 183% to over 600,000 shares.
While following institutional moves can provide valuable insights, investors are advised to approach these strategies with care. The motives behind hedge fund activities can be elusive, and retail investors may find it challenging to accurately interpret their strategies. Moreover, Rigetti’s stock currently trades at a $9.6 billion market cap, despite generating minimal revenue and just beginning to break even, underscoring the inherent risks of investing in this nascent industry.
The road to large-scale commercialization of quantum computing is fraught with challenges, and while the potential rewards could be substantial, hurdles remain. Achieving breakthroughs will require time and considerable investment. Therefore, while optimism surrounds Rigetti and its technology, a cautious approach is advisable for potential investors, suggesting that a small, speculative investment may be the most prudent course of action.