Could Rigetti Computing Become the Next Nvidia?

Nvidia's Growth and Market Position - A $1,000 investment in Nvidia over the past 10 years would have grown to roughly $265,840, largely driven by its data center GPUs for AI tasks [1] - Nvidia's revenue grew at a CAGR of 31% from fiscal 2014 to fiscal 2024, with analysts expecting a CAGR of 56% from fiscal 2024 to fiscal 2027 as the AI market expands [3] - Nvidia is the world's second-most valuable company with a market cap of $3.35 trillion, but investors seeking bigger gains might look to small-cap companies in nascent growth industries [4] Quantum Computing Market Potential - Quantum computers use qubits to process data faster than traditional binary computers, though they are still massive, expensive, and error-prone [6] - The quantum computing market is expected to expand at a CAGR of 34.8% from 2024 to 2032 as companies work to miniaturize QPUs and improve error correction [7] Rigetti Computing Overview - Rigetti Computing, a $335 million quantum computing stock, has rallied nearly 80% this year and aims to become a leader in the quantum computing niche [5] - The company designs and manufactures quantum integrated circuits and offers a cloud platform for developers to write quantum algorithms, making it a "full-stack" quantum computing company [8][9] - Rigetti went public via a SPAC merger in March 2022, despite the high costs of manufacturing, operating, and maintaining quantum computing hardware [10] Rigetti's Financial Performance and Challenges - Rigetti's revenue grew from $8 million in 2021 to $13 million in 2022 but declined to $12 million in 2023, missing its pre-merger projection of $34 million in 2023 [11] - The company faced challenges including uneven government contracts, leadership changes, rising interest rates, and persistent losses, leading to a stock price low of $0.38 in May 2023 [12] Rigetti's Technological Advancements and Future Plans - Rigetti launched its 9-qubit Novera QPU in December 2023, priced at $900,000, with orders from customers like SQMS, AFRL, and Horizon Quantum Computing [13] - The company plans to deploy its 84-qubit Ankaa-3 system by the end of 2024, a 36-qubit modular system in 2025, and a 100-qubit non-modular system by the end of 2025, with long-term goals for a 336-qubit system [14] - Analysts expect Rigetti's revenue to decline 8% to $11 million in 2024 but grow 47% to $16.2 million in 2025 and surge 130% to $37.3 million in 2026 as it scales up its business [15] Rigetti's Speculative Potential - Rigetti's stock is priced at 9 times its 2026 sales, and while it has grand ambitions in the quantum computing market, it remains a highly speculative play with risks of running out of cash before scaling up [16]