Rigetti Computing (RGTI) Stock Jumps After India Quantum Collaboration Announcement
Rigetti Computing (RGTI) experienced a 7.1% increase in its stock price following the announcement of a Memorandum of Understanding (MOU) with India's Centre for Development of Advanced Computing (C-DAC). The collaboration aims to explore the co-development of hybrid quantum computing systems to support government and academic research and development (R&D) initiatives.
Strategic Partnership with C-DAC
This partnership signifies a strategic move for Rigetti to tap into global public sector interest in quantum computing. The MOU with C-DAC is designed to align Rigetti with government-backed quantum R&D, which is a significant catalyst considering Rigetti's historical reliance on contract wins and grants. This is especially important as the industry sees major investments, such as Nvidia's US$600 million commitment to quantum computing companies.
Investment Narrative and Potential Risks
For Rigetti Computing shareholders, the core investment thesis hinges on the successful commercialization of quantum hardware and hybrid systems. The recent MOU with C-DAC marks a notable step in this direction. However, this announcement arrives in the context of declining sales and ongoing losses for Rigetti. While increased market attention has driven options activity higher, the immediate impact on revenue or profitability may be limited, as government alliances often unfold over extended periods. Risks such as continued shareholder dilution and operational volatility remain key considerations for investors.
Fair Value Estimates and Market Sentiment
The Simply Wall St Community’s fair value estimates for Rigetti range widely, from US$0.22 to US$24.50, based on 34 individual estimates. Despite differing outlooks, options trading has recently surged, indicating that shifts in market sentiment can significantly impact the company's share price, even before fundamental changes materialize. Investors should consider these diverse perspectives when assessing Rigetti’s evolving risk profile.
RGTI: Buy, Hold, or Sell?
While the alliance with C-DAC is promising, investors should be mindful of Rigetti’s ongoing losses. A comprehensive valuation report suggests that Rigetti Computing might be priced higher than its financials justify. The collaboration with C-DAC presents a potential growth opportunity, especially as competition and spending in the quantum computing sector intensify.