Rigetti Computing Faces 32.25% Stock Drop Amid Quantum Computing Skepticism and Increased Volatility

StockInvest.us, 1 month ago

Rigetti Computing, Inc. Technical Analysis

Rigetti Computing, Inc. (RGTI) experienced a significant decline in its stock price by 32.25% to close at $6.05 on January 13, 2025. This drop was accompanied by a trading volume (182.05 million) that substantially exceeded its average volume (95.54 million), indicating strong selling pressure. The Relative Strength Index (RSI14) stands at 48, suggesting a neutral trend, neither oversold nor overbought. The short-term 50-day moving average ($6.31) exceeded the closing price, but RGTI remains well above the 200-day moving average ($2.35), indicating a long-term uptrend despite recent volatility. The MACD value of 4.62 signals bearish momentum. Support and resistance are noted at $5.97 and $6.49, respectively, framing the anticipated price fluctuation range.

Fundamental Analysis

Fundamentally, Rigetti Computing operates in the nascent and high-potential field of quantum computing. However, recent news attributes part of the stock's downturn to increasing skepticism from prominent technology leaders like Mark Zuckerberg regarding the commercial viability of quantum computing in the near term. No profits have been realized thus far, as evident from a negative EPS (TTM) of -0.37 and a non-applicable P/E ratio of -16.35. This indicates ongoing financial losses and potential reliance on future expectations rather than present fundamentals. The consensus target and analyst recommendations reveal a divergence, with a median price target of $2, which is substantially below the current trading price, yet analyst sentiment is bullish, characterized by four buy ratings.

Short-term Prediction (Next Trading Day and Upcoming Week)

Rigetti Computing, Inc. For the next trading day (January 14, 2025) and the upcoming week, Rigetti's stock may experience further volatility, primarily influenced by its current position below resistance levels and broader skepticism about quantum computing. The oversupply of the stock, combined with broader market pressures, particularly in technology sectors, could force prices to test the $5.97 support level repeatedly. Any positive news or sentiment shift might enable a short-term rebound towards the $6.49 resistance.

Intrinsic Value and Long-term Investment Potential

Rigetti's stock suffers from an inflated market cap relative to its operational performance, as seen through lack of earnings. Given the current environment, intrinsic value seems challenged by speculative elements rather than defined by present earnings potentials or cash flows. Long-term investment potential relies heavily on quantum computing's maturation to a commercially viable state. However, skepticism from industry leaders and legal caution signaled by ongoing investigations suggest some institutional hesitance and risk for investors.

Overall Evaluation

Taking into account both technical and fundamental elements, Rigetti Computing is categorized as a 'Hold' candidate. Despite a high degree of potential and current buy sentiment from analysts, the stock's intrinsic valuation remains speculative, driven by future market promises and significant volatility. Investors seeking to allocate capital should consider weighing potential rewards against the substantial inherent risks, particularly as scrutiny on the commercial viability of quantum computing remains under scrutiny. These factors warrant cautious engagement while monitoring future developments closely.

Check full Rigetti Computing, Inc. forecast and analysis here.