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Why Rigetti Computing Stock Is Plummeting This Week
Rigetti Computing (NASDAQ: RGTI) stock is crashing in this week's trading. The quantum computing company's share price is down 47.2% from last Friday's market close as of Wednesday, according to data from S&P Global Market Intelligence.
With the stock market closed today in remembrance of President Jimmy Carter, Rigetti Computing has only seen three days of trading so far this week. But even with the abbreviated trading session, the company's share price has seen a massive pullback due to bearish comments from Nvidia president Jensen Huang, as well as macroeconomic risk factors.
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Comments from Nvidia's CEO just crushed Rigetti stock
Speaking at an event for analysts at this year's CES, Nvidia CEO Jensen Huang gave his outlook on the quantum computing space -- and his comments triggered crushing sell-offs for Rigetti and other specialists in the category. Huang stated that quantum computers wouldn't be an ideal solution for many computing problems, and he also poured cold water on hopes that the technology would be ready for commercial use anytime soon.
Huang said: "If you kind of said 15 years for very useful quantum computers, that'd probably be on the early side. If you said 30 is probably on the late side. But if you picked 20, I think a whole bunch of us would believe it." While Huang thinks that quantum computing could ultimately be used to push artificial intelligence (AI) forward, his outlook for the commercialization over the next decade is far more bearish than many investors would like.
Some quantum experts and industry watchers have theorized that commercially useful quantum computing applications could start to arrive sometime around 2030. But if Huang's outlook is closer to correct, that could paint a dim picture for Rigetti and other relatively small tech players aiming to score big wins in the emerging tech category.
Macroeconomic dynamics add to Rigetti stock's woes
This week's trading has seen a renewed focus on macroeconomic risks. The latest survey from the Bureau of Labor Statistics showed more job openings than anticipated, which has been interpreted as a potentially bearish indicator for inflation. Adding another source of volatility, President-elect Trump is reportedly considering declaring a national economic emergency once he takes office in order to quickly introduce high tariffs on imported goods. Speculative stocks are also seeing big pullbacks in conjunction with rising yields for U.S. Treasury bonds.
Despite the stock seeing dramatic sell-offs this week, Rigetti's share price is still up 781% over the last year. As a relatively small company with a speculative outlook in an emerging industry, Rigetti stock is predisposed to see big swings in conjunction with bearish macroeconomic news. With Nvidia's CEO also serving up a concerning forecast for the usefulness of quantum computing technologies, it's not surprising that Rigetti stock has seen a big pullback this week.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
