You won’t believe why Rigetti stock went 40% down

Shares of Rigetti Computing, Inc. (NASDAQ:RGTI) declined 7.7% on Tuesday, trading as low as $17.55 before closing at $18.00. During mid-day trading, 47,462,948 shares changed hands, a significant decrease of 64% compared to the average session volume of 130,951,453 shares. The stock had previously closed at $19.51.

Several research firms recently reviewed Rigetti Computing’s stock. Benchmark restated a “buy” rating with a price target of $2.50 in a report dated November 14. Needham & Company LLC also reiterated a “buy” rating with a $2.00 target on November 13. Craig Hallum initiated coverage on December 20, issuing a “buy” rating with a price target of $12.00. Additionally, B. Riley increased their price target from $3.50 to $4.00 while maintaining a “buy” rating on November 25. Currently, five analysts have rated the stock as a buy, providing an average price target of $4.80.

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Rigetti Computing reported a quick ratio of 4.84 and a current ratio of 4.84, with a debt-to-equity ratio of 0.02. The stock has a 50-day simple moving average of $6.14 and a 200-day simple moving average of $2.76, contributing to a market capitalization of $3.54 billion. The company is operating at a PE ratio of -48.39 and a beta of 1.31.

In related insider activity, Director Michael S. Clifton sold 125,000 shares on December 9 at an average price of $5.03, totaling $628,750. Clifton’s ownership decreased by 10.51%, leaving him with 1,063,864 shares valued at approximately $5.35 million. Furthermore, major shareholder Bessemer Venture Partners X.L. sold 580,125 shares on November 14 at an average price of $1.63, resulting in total sales of $945,603.75 and a 2.96% reduction in ownership. Over the past ninety days, insiders have sold 2,955,125 shares valued at $5,489,354, with insiders owning 2.81% of the company’s stock.

According to Marketbeat, institutional investors have also made significant movements regarding Rigetti Computing. Caprock Group LLC acquired a new stake valued at approximately $42,000 in the second quarter. Arete Wealth Advisors LLC invested around $45,000 in the third quarter. SG Americas Securities LLC increased its holdings by 166.9% in the third quarter, now owning 63,202 shares valued at $49,000 following a purchase of 39,526 additional shares. JPMorgan Chase & Co. raised its stake by 3.4%, now holding 62,360 shares valued at $49,000 after acquiring 2,045 additional shares. Point72 DIFC Ltd. added a new stake valued at roughly $88,000 in the second quarter. Overall, institutional investors currently hold 35.38% of Rigetti Computing’s stock.

Rigetti Computing, Inc. focuses on building quantum computers and superconducting quantum processors. The company provides quantum processing units, including a 9-qubit chip and the Ankaa-2 system under the Novera brand, while offering access to its quantum computing capabilities through a quantum computing as a service model.

The decline in Rigetti’s stock follows comments from Nvidia CEO Jensen Huang, who stated that practical quantum computers are likely 15 to 30 years away. Huang, speaking during Nvidia’s analyst day, suggested that a timeframe of about 20 years would be a reasonable estimate for significant advancements in quantum computing.

As a result of these comments, stocks tied to quantum computing, including Rigetti Computing, saw significant drops, with Rigetti plunging 40% at one point during the trading session. Other companies, such as IonQ, D-Wave Quantum, and the Defiance Quantum & AI ETF, also experienced substantial declines following Huang’s remarks.

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Featured image credit: Rigetti