Should You Buy, Sell or Hold RGTI Stock at Its P/S of 116.46X?

Core Viewpoint - Rigetti Computing (RGTI) shares are currently overvalued, indicated by a Value Score of F, with a forward 12-month price/sales (P/S) ratio of 116.46X, significantly higher than its median of 94.39X and the Zacks Computer and Technology sector's 6.53X [1]. Group 1: Stock Performance - RGTI's shares have surged 82.2% over the past month, outperforming the Zacks Internet - Software industry's return of 3.8% and the broader Zacks Computer & Technology sector's growth of 2.6% [4]. - RGTI has outperformed its peer, D-WAVE QUANTUM (QBTS), which gained 392% over the past month, attributed to RGTI's expanding clientele and growing influence in the quantum computing space [6]. Group 2: Quantum Computing Advancements - RGTI has made significant advancements in quantum computing, including the successful demonstration of 9-qubit chips with 99.4% median 2-qubit gate fidelity and plans to release a 36-qubit system by mid-2025 [7]. - In December 2024, RGTI launched its 84-qubit Ankaa-3 quantum computer, featuring a hardware redesign that enhances performance and scalability, with a median 99% iSWAP gate fidelity and 99.5% fSim fidelity [8]. - RGTI's multi-chip architecture development positions the company at the forefront of the quantum computing industry, enhancing its capabilities as the market evolves [9]. Group 3: Strategic Partnerships - RGTI's partnerships with Riverlane, NVIDIA, and Quantum Machines have been crucial for its growth, establishing the company as a key player in the rapidly evolving quantum computing space [10]. - Collaboration with Quantum Machines has led to the successful application of artificial intelligence to automate the calibration of its 9-qubit Novera QPU, achieving high gate fidelities [11]. - Rigetti's partnership with Riverlane has resulted in the demonstration of real-time and low-latency quantum error correction on its 84-qubit Ankaa-2 system, enhancing fault tolerance in quantum computing [12]. - Collaborations with academic and industry leaders, such as the UK's National Quantum Computing Centre and the Israeli Quantum Computing Center, provide access to advanced research facilities and expertise [13]. Group 4: Financial Outlook - The Zacks Consensus Estimate for 2025 revenues is projected at $15.32 million, indicating a year-over-year increase of 40.29% [14]. - The consensus mark for 2025 loss per share is pegged at 28 cents, reflecting a year-over-year increase of 17.65% [14]. Group 5: Market Challenges - Despite advancements, RGTI faces challenges from macroeconomic uncertainties and intense competition in the quantum computing market, negatively impacting top-line growth [15]. - Concerns raised by industry leaders, including Meta CEO Mark Zuckerberg and NVIDIA CEO Jensen Huang, about the near-term practical applications of quantum computing have contributed to a market downturn affecting Rigetti [16].