Rigetti Computing, Inc., the quantum computing giant, experienced significant stock market momentum following the launch of its latest quantum system, the 84-qubit Ankaa-3. Over the course of just one trading day, shares surged by more than 15%, reflecting strong investor confidence. Year-to-date, Rigetti's stock has skyrocketed by nearly 1,100%, representing over 1,233% growth within the past six months alone.
The Ankaa-3 system not only boasts remarkable capabilities but also signifies a noteworthy advancement in quantum computing technology. Unveiling impressive performance metrics, including 99.5% median integrity in two-qubit gates, the Ankaa-3 establishes new benchmarks for quantum performance. This flagship system integrates state-of-the-art Alternation-Bias Assisted Annealing (ABAA) technology along with enhanced qubit layouts and improved cryogenic structures, setting it apart from previous models.
Accessible via Rigetti Quantum Cloud Services (QCS), the Ankaa-3 is positioned to interface with major cloud platforms, including Microsoft Azure and Amazon Braket, starting early 2025. Rigetti's CEO, Dr. Subodh Kulkarni, highlighted the company’s solid financial footing, reporting $225 million in cash reserves alongside aspirations to develop scalable, modular systems exceeding 100 qubits by late 2025. Kulkarni expressed confidence, stating, "With approximately $225 million of cash, cash equivalents and available-for-sale investments and no debt, we are extremely confident in our ability to deliver on our roadmap and performance goals."
Notably, the Ankaa-3's design is engineered to facilitate advanced algorithmic research. Improvements include median operation times of 72-nanoseconds for iSWAP gates and even faster times at 56 nanoseconds for fSim gates, making it ideal for complex applications such as random circuit sampling. These advances reduce error rates, which are expected to be halved by the end of 2024.
Investment interest surrounding the Ankaa-3's launch is also reflected by analyst ratings and stock performance. Following the announcement, Craig Hallum provided coverage with a 'buy' rating, setting its price target at $12. Another firm, B. Riley, raised Rigetti's price target from $3.50 to $4.00, maintaining its buy rating. Analysts from Needham & Company LLC and Benchmark also reissued buy ratings with respective price objectives of $2.00 and $2.50, indicating broad endorsement of the stock within investment circles. According to MarketBeat, Rigetti currently holds a consensus rating of "Buy" with average price expectations around $4.80.
Rigetti’s stock is gaining traction not only due to the Ankaa-3 launch but also because of its positioning within the burgeoning quantum computing sector. Quantum computing as an industry has captivated investors, especially as its potential begins to emerge. Craig Hallum analyst Richard Shannon emphasizes the transformative potential of quantum computing, likening its current phase to the early days of the internet. Despite recognizing the speculative nature of this investment surge, he also stated, "Even after this runup, the $1-8B QC EVs are still quite small compared to the $1T+ market cap classical compute-driven companies.” This comparison positions Rigetti and its peers well against their classical computing counterparts, underscoring the disruptive potential of quantum technology.
Shannon also noted Rigetti’s unique advantages, such as its extensive chiplet design experience and strong governmental relationships. These factors may propel the company toward achieving quantum advantage by 2028, enabling it to scale its technology more effectively than many competitors. The support from U.S. government initiatives, including planned funding increases for quantum computing research, adds another layer of encouragement for investors.
Despite the optimism surrounding Rigetti's growth, shareholder activity has shown some volatility. Insider trading reveals significant recent transactions, including Director Michael S. Clifton's sale of 125,000 shares at $4.00 per share. While this was notable, Clifton remains heavily invested, with holdings still valued at around $4.75 million. Meanwhile, Bessemer Venture Partners also divested over 1.2 million shares, showcasing the dynamic trading environment surrounding Rigetti's stock.
Institutional interest has surged as well, with several large investors increasing their stakes significantly. Geode Capital Management has raised its holdings by nearly 20% during the third quarter alone. Other investors like Penserra Capital Management and Bank of New York Mellon also reported corresponding increases, reflecting considerable institutional confidence amid the stock’s meteoric rise.
Overall, the launch of the Ankaa-3 quantum system marks both a technical breakthrough and a financial windfall for Rigetti Computing, helping it establish itself as one of the foremost players within the quantum computing arena. With its cutting-edge technology, solid financial framework, and proactive market strategy, Rigetti is well-positioned for future growth, potentially redefining boundaries within the computing space.
Investors seem eager to capitalize on this momentum, with many hoping the Ankaa-3 will pave the way for more innovative developments. The excitement surrounding quantum computing could mean this is just the beginning. Dr. Kulkarni affirmed, "The remarkable performance of Ankaa-3 reinforces our leadership in the superconducting quantum computing field," highlighting the belief among executives and investors alike, poised to watch the company stride confidently forward.