Rigetti leads quantum stocks higher after B. Riley says some commercialization concerns misplaced
Jan. 14, 2025 11:30 AM ET
By: Ravikash Bakolia, SA News Editor
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B. Riley Securities maintained its Buy ratings on Rigetti Computing (NASDAQ: RGTI) and D-Wave Quantum ( QBTS) and raised the price targets on the shares, noting that some commercialization concerns are misplaced.
Shares of Rigetti jumped about 15% on Tuesday, leading quantum computing stocks higher after last week's dip following Nvidia's ( NVDA) CEO Jensen Huang's comments that "very useful" quantum computers are over a decade away. D-Wave Quantum ( QBTS) was up about 8%, Quantum Computing (NASDAQ: QUBT) around 3% and Arqit Quantum ( ARQQ) nearly 6%. However, IonQ ( IONQ) dipped about 2% on Tuesday.
Analyst Craig Ellis said they believe that despite recent well publicized CEO views on an elongated path to commercialization, a slew of recent and, in some cases, materially underappreciated data points offer broadly encouraging technical advances to significantly boost confidence in quantum's intermediate to long-term high-value workload scalability into areas unreachable to classic CPU and GPU computing, raising the arc of B. Riley's bullish sector thesis in the years ahead.
In addition, equity capital raises amid the fourth quarter of 2024's high-volume share gains significantly ameliorated covered company cash sufficiency concerns, easing a dark multi-year share cloud, the analysts added.
Stocks thus reversed a two-year downtrend, with large gains notching market-leading fourth quarter 2024 upside. And while a fierce sell-off ensued in the past week with now -51% average declines, most sit well above early to mid-fourth quarter 2024 levels, according to the analysts.
Ellis said they raised price targets for D-Wave Quantum to $9.00 from $4.50 and Rigetti to $8.50 from $4 viewing the pair as potential commercial and government-related quantum uptake leaders, respectively. Looking ahead, the analyst believes that technical system and software development, commercial engagement, and ecosystem maturation progress are key multi-year issues.
The analyst added that bears may note still-thorny technical scale-up hurdles, elongated paths to profitability, and now-high valuations, while bulls will counter with additional hyper-scale quantum computing development initiative progress, foreign (China) national government moves reigniting western quantum computing development urgency and rising commercial uptake visibility to help catalyze consensus pull-in potential and stock support.
Ellis noted that they are mindful of the ferocity of the in-progress retreat, but see evidence of a frontier technology investor interest searching for "what's next" potential beyond the widely visible AI enthusiasm is building, to potentially benefit D-Wave Quantum and Rigetti financials and thus the shares ahead. |
