As the holiday trading season stirs uncertainty, Rigetti Computing, Inc. (NASDAQ: RGTI) faced a sharp decline on Friday, with shares falling 8.7% to close at $22.38, down $2.13. The session saw the stocks fluctuate within a range of $22.33 to $24.37, reflecting a significant reaction to the current market environment.
In post-market activities, the stock showed slight resilience, with indications of a rebound to $22.44 as investors contemplated future opportunities. The U.S. markets are set to remain closed Saturday, which places increased emphasis on how liquidity dynamics, trader positioning, and overall market sentiment may affect developments in the upcoming trading week.
This notable decline wasn’t prompted by any specific company announcements. Instead, it stemmed from two principal factors: the pervasive low liquidity typical of holiday trading periods and a generally subdued broader market. With many institutional traders absent during this festive season, even minor trades led to considerable price swings—a phenomenon often termed the “holiday gap.” This environment particularly impacts high-beta stocks such as Rigetti, which can experience volatilities that are disproportionate to market movements.
Valuation in Question Amid High Market Interest
The last few days have seen a flurry of analyst discussions surrounding Rigetti’s valuation and long-term outlook, even amid a lack of new filings from the company. Analysts at Wedbush have initiated coverage with an optimistic Outperform rating alongside a price target of $35, while Mizuho has set its sights higher, at $50, citing the significant potential in the quantum computing arena.
Conversely, some experts remain skeptical, pointing to the company’s ongoing unprofitability and inconsistent revenue performances. This dichotomy has created a unique situation where investment conversations about Rigetti appear contentious, with market participants torn between enthusiasm over the company’s technological advancements and the stark reality of its financial metrics.
Institutional Investors Show Continued Interest
Despite the volatility, institutional investment in Rigetti is growing. Osaic Holdings notably ramped up its stake by 119.2%, now owning approximately 260,000 shares. Major players like Vanguard and BlackRock, among other hedge funds, have also retained their holdings, suggesting that Rigetti is becoming increasingly appealing to institutional investors.
This burgeoning institutional presence indicates that the stock is now sufficiently “crowded,” capable of drawing interest in the form of both substantial financial backing and speculative trading that could enhance price volatility around anticipated news, contracts, or milestone announcements.
The Bullish vs. Bearish Outlook
Looking ahead, the roadmap for Rigetti remains pivotal to market expectations. CEO Subodh Kulkarni has reiterated their commitment to delivering a 100+ qubit system by the end of 2025, with aspirations for a 150+ qubit system by late 2026, and a robust 1,000+ qubit system targeted for the end of 2027. Early commercial orders for two 9-qubit Novera systems totaling $5.7 million are also on track for delivery in the first half of 2026.
Yet, despite these promising developments, the company struggles with profitability, with current revenue levels lagging significantly behind what might justify its market capitalization. Additionally, the high short interest hovering around 12.5% of the public float reflects a potential for sudden price fluctuations that could catalyze either quick rallies or sharp retreats based on market sentiment.
As the year closes, all eyes will be watching how Rigetti navigates these turbulent waters—a blend of innovation, institutional interest, and speculative trading that could dictate its trajectory in the upcoming year.
