Why Rigetti Computing Stock Is Plummeting This Week

Rigetti Computing (RGTI) has faced a significant drop in its stock price this week, plummeting 47.2% since last Friday's market close as of Wednesday, according to information from S&P Global Market Intelligence.

This week's trading has been affected by the stock market closure in honor of President Jimmy Carter, meaning Rigetti only had three trading days to contend with the sudden downturn. The stock's decline can be attributed to pessimistic comments made by Nvidia CEO Jensen Huang during an event for analysts at this year's CES, alongside various macroeconomic concerns.

Responses to Nvidia's CEO Comments

During the event, Huang shared his views on the current state of quantum computing, which seemed to undermine investor confidence in Rigetti and other companies in this sector. He expressed skepticism about the practical applications of quantum computers in the near future, dismissing the idea that they would solve many computing challenges. Huang also projected that commercially viable quantum computing would take much longer to develop than some investors had hoped.

Specifically, Huang suggested that it might take 15 to 30 years before quantum computers are genuinely useful, stating, "If you picked 20, I think a whole bunch of us would believe it." While he acknowledged the potential for quantum computing to enhance artificial intelligence (AI) down the line, his timeline for widespread usage could be disheartening for investors eager to see technology advancements.

Some industry analysts have speculated that practical applications for quantum computing could emerge by 2030. However, if Huang's analysis proves accurate, it may cast a long shadow over Rigetti and similar small tech firms aiming for breakthroughs in this developing field.

Macroeconomic Concerns Intensify Rigetti's Stock Struggles

This week has also seen a heightened awareness of macroeconomic risks affecting the market. A new report from the Bureau of Labor Statistics indicating more job openings than expected has sparked worries about inflation. Additionally, news that President-elect Trump is contemplating declaring a national economic emergency to impose high tariffs on imports could further add to economic instability.

Speculative stocks, including those in the tech sector, have been experiencing steep declines due to rising yields on U.S. Treasury bonds. Despite the recent sell-off, Rigetti's stock has increased by 781% over the last year, marking its status as a smaller company in an emerging industry that naturally experiences volatility in response to economic shifts.

In light of Nvidia's CEO issuing a cautionary forecast about the application of quantum computing, it is understandable that Rigetti's stock is witnessing significant downward pressure this week.

Disclaimer: The author holds no positions in the stocks mentioned. This article serves informational purposes only and does not constitute financial advice.

Rigetti, Nvidia, Stock