Is Rigetti Computing stock (RGTI) the Nvidia of quantum computing?

Quantum computing stocks don’t generate nearly the headlines that AI stocks do.

That's argely due to the fact that unlike AI which is already powering popular software programs like ChatGPT, the quantum computing industry is seen as still being years or even decades away from reaching its full potential.

At the forefront of quantum computing are old-guard tech behemoths IBM (IBM), Alphabet (GOOG), and Microsoft (MSFT). Given their clout, it’s not surprising that their product launches tend to serve as rising tides that lift all boats.

So, when Microsoft released its Majorana 1 quantum computing chip last week, it sent other quantum computing stocks soaring. The same thing happened in December when Alphabet released Willow, its own quantum chip.

One of those stocks that rode the wave was Rigetti Computing Inc. (RGTI), which rose 10% in premarket trading after Majorana 1 was announced.

Profits for the industry could be decades away

Though perhaps not a household name among many investors, Rigetti builds quantum computers and superconducting quantum processors and is considered to be a pioneer in full-stack quantum computing.

It is also one of the hottest smaller companies in the space. In 2024, the stock soared a massive 1500%.

However, quantum computing stocks are inherently volatile because so many questions remain about how these companies will innovate other industries the way AI is doing—and also just as importantly, when it will actually happen.

Meta CEO Mark Zuckerberg estimated during an appearance on Joe Rogan’s podcast in January that significant advancements in quantum computing are likely a decade away. Meanwhile, Nvidia CEO Jensen Huang predicts that it will actually be 15 to 30 years before we see serious progress in the field.

RGTI plunged 30% following Zuckerberg and Huang’s pessimistic outlook for any near-term breakthroughs in the industry.

Growth projections remain fuzzy

What this shows is that Rigetti's stock price isn't grounded in fundamentals but rather in the consensus outlook of quantum computing—with the assumption that this company will claim a slice of it.

And since investors don’t have a clear forecast for when Rigetti or other young quantum computing companies might start turning a profit, their growth trajectory can be even more difficult to gauge than that of other small-cap stocks.

Market research firm IDC estimates that the total commercial sales for quantum computing will be $8.9 billion in 2028, according to Barron’s. But some industry experts are skeptical about reaching that revenue level so soon.

In a report published last year on the quantum computing industry, Boston Consulting Group (BCG) estimated a $90 billion to $170 billion market for hardware and software providers in the space, but not until 2040.

“While there are clear scientific and commercial problems for which quantum solutions will one day far surpass the classical alternative, it has yet to demonstrate this advantage at scale,” BCG partner and VP Jean-Francois Bobier said in a statement. “Nonetheless, the momentum is undeniable.”

RGTI fell nearly 11% on Tuesday, marking three consecutive days of losses. It rebounded on Wednesday and closed up nearly 3% to $9.29.

Rigetti will report its Q4 earnings on March 5.