Sign InRigetti Computing Faces Resistance at $10 Amid Volatility and Long-Term Potential Despite Unprofitability
Summary
On March 25, 2025, Rigetti Computing, Inc. (RGTI) closed at $9.82 amid resistance testing at $10.04, highlighting a complex interplay of technical pressures and underlying fundamental challenges, while analysts maintain a 'Buy' outlook driven by the stock's long-term potential in quantum computing.
Technical Analysis
Rigetti Computing, Inc. (RGTI) closed at $9.82 on March 25, 2025, marginally increasing by 0.41% over the previous close. The stock is testing a resistance level at $10.04, with a recent trading range between $9.47 and $10.02. Currently, it is trading below its 50-day moving average of $10.71, indicating potential sell pressure amid a possibly changing trend. The 200-day moving average stands significantly lower at $4.72, reflecting the stock's substantial gains in recent months. With an RSI of 59, the stock is approaching overbought territory, suggesting a potential price correction. However, the MACD value of -0.68 may support a statistically bearish move, indicating downtrend momentum could linger. The average true range (ATR) of 12.62 signals potential high volatility in the stock’s movements.
Fundamental Analysis
Fundamentally, RGTI presents a challenging scenario for investors. The stock's market capitalization reaches approximately $2.81 billion, yet its negative EPS of -1.09 reflects unprofitability, a common trend within emerging tech sectors like quantum computing. A negative P/E ratio of -9.01 further corroborates an earnings deficit. Furthermore, the current discounted cash flow (DCF) estimate of -2.57 suggests that its intrinsic value is likely over-inflated at the current trading price.
Analyst price targets, with a consensus median of $3.00, are markedly lower than the current price, implying limited upside in the near term. Despite this, the consensus among analysts labels it as a 'Buy', suggesting confidence in future growth prospects driven by anticipated advancements in quantum computing technology and market adoption.
Near-term Predictions
Given current technical indicators and fundamental data, RGTI may experience price volatility in the coming days. As the stock hovers around its $10 resistance level, it may either break out positively, potentially reaching last week’s high, or face resistance, leading to a pullback closer to the support level of $8.95. For the upcoming week, refining company-specific news and broader market conditions will be essential to observe, as they may influence investor sentiment in the speculative quantum computing space.
Intrinsic Value and Long-term Investment Potential
The DCF value suggests that there is a disconnect between Rigetti's market valuation and its intrinsic potential. The firm operates in the exponentially promising field of quantum computing, heralding long-term potential fueled by its capacity to process immense data volumes efficiently. Moreover, significant interest and investments from major global technology giants underscore the sector's promising future. Thus, for patient investors with a high-risk tolerance, RGTI may offer appealing long-term potential despite current volatility and unprofitability.
Overall Evaluation
Considering the once-speculative nature of the stock balanced by its technological promise, Rigetti Computing, Inc. fits a 'Hold' category. While current valuations may not align with intrinsic worth, market confidence in quantum computing growth and analyst buy ratings suggest patience could reward long-term investments. However, investors should remain aware of associated volatility and potential downward adjustments in the near term as the market digests both negative profitability and rapid technological advancements.
