Rigetti Secures Multi-Million Dollar Air Force Contract

Rigetti Computing recently revealed that it has landed a multi-million dollar contract with the Air Force aimed at advancing quantum technology.

This announcement created a buzz among investors, though CEO Subodh Kulkarni noted that it’s part of an advanced research initiative.

On Friday, Rigetti’s stock (NASDAQ: RGTI) rose by 15.4% as of 2:59 PM, while both the S&P 500 and Nasdaq Composite indices gained 0.3% and 0.4%, respectively.

The company has secured a $5.8 million, three-year contract from the Air Force Research Institute, which will concentrate on quantum networking technology.

As part of this deal, Rigetti plans to collaborate with the Dutch startup QPHOX to investigate methods for facilitating information transfer between quantum computers.

While investors were optimistic, Kulkarni emphasized that the project is still in the experimental stage, describing it as featuring numerous research programs currently in the R&D phase.

There are tremendous possibilities in quantum technology, yet it is still in a nascent stage, perhaps more than many investors realize. Some might say that the excitement around Rigetti and its associates is a bit inflated. The company’s price-to-sales ratio is quite striking at 779, given that last year’s sales totaled only $10.8 million, which is even lower than anticipated figures for 2023. The current market cap exceeds $9 billion.

This brings into question the risk involved. There’s a lot of enthusiasm in the quantum computing sector—maybe too much from an investor’s perspective. Personally, I’d hesitate to invest in Rigetti. Instead, it could be worth looking into stocks like Alphabet.

Before considering an investment in Rigetti Computing, it might be good to reflect on this.

Analysts from Motley Fool’s Stock Advisor recently highlighted what they believe are the top stocks to invest in right now—Rigetti Computing didn’t make the list. The selected stocks are expected to offer significant returns in the coming years.

It might be useful to ponder some historical examples: If you’d invested $1,000 in Netflix back in December 2004, you’d have around $651,345 today. Likewise, a $1,000 investment in Nvidia from April 2005 would now be worth roughly $1,080,327.