This Quantum Computing Stock Under $10 is Breaking Out, But is it a Buy?

Rigetti Computing (RGTI) is surging again today, up 16% this afternoon. The stock has broken out to a gain of 308% in the last month, fueled by high-profile advancements in the quantum computing industry - most notably, the launch of Google’s new Willow chip.

Plus, earlier this week, Rigetti said it achieved the automation of quantum computer calibration using artificial intelligence (AI), in collaboration with Quantum Machines.

Rigetti’s focus on superconducting qubit technology and its strategic partnerships, such as with the U.K.'s National Quantum Computing Centre, underscore its commitment to innovation. Despite its smaller market capitalization compared to competitors, Rigetti's plans for a new modular system architecture in 2025 highlight its forward-looking approach. 

RGTI’s upward momentum culminated in an intraday peak of $7.96 on Wednesday, and the shares have more recently found their progress capped in the $7.00-$7.50 range. The 14-day Relative Strength Index (RSI) has reached 76.08, suggesting that the quantum computing stock is currently overbought, which could lead to a potential pullback in the near term.

The stock's high valuation of 151x forward sales reflects the speculative nature of the quantum computing sector, and is worth careful consideration by investors. Notably, the company raised cash at a discounted price of $2.00 per share less than a month ago - a fact noted by Citron’s Andrew Left in a recent bearish comment on the quantum computing stock.

While coverage is light, analysts are more positive; the average rating on Rigetti is a “Strong Buy” among the four experts offering opinions. That said, at $6.92 per share, the stock now trades at a steep premium to its average price target of $3.50. 

Overall, RGTI stock presents a compelling opportunity, albeit with the inherent risks typical of emerging technologies.