Will Rigetti Computing Stock Hit $0?

It’s a scary thought for a stock to go to $0. This means that a company has gone bankrupt and investors may receive almost nothing once the liquidation of assets is complete. Several companies are much less likely to fail than others, because they operate in businesses that have continuous sales of products.

There are also investments available that are working on future technologies, such as biotech and quantum computing companies. Rigetti Computing (NASDAQ:RGTI) It falls into the latter category, so it’s at a higher risk of hitting $0 than many others on the market.

But is the clock ticking for Rigetti Computing? Let’s take a look.

Rigetti Computing is competing in the race to develop a viable quantum computer. It is not an easy task and there are several strong competitors, some with almost unlimited funding, racing to develop a commercially viable quantum computer.

Rigetti Computing is known as a quantum computing pure play, meaning its sole focus is on bringing quantum computing products to market. This could make the stock a big winner if it succeeds, but if it fails, it could hit $0 quickly.

During the third quarter, Rigetti Computing only had revenue of $1.9 million, but operating losses totaled $20.5 million. This is a serious imbalance, but to be expected for an early-stage company like Rigetti.

The bigger question is how long Rigetti can survive at the current pace of spending. As of Nov. 6, it had about $600 million in cash and equivalents. That provides a good cushion and allows Rigetti to operate at its current pace for several years without needing to seek external financing.

However, if the company’s recent results are indicative of future success, it may be difficult to raise additional capital.

One of the biggest contracts any quantum computing company can get is from DARPA, the Defense Advanced Research Projects Agency. DARPA helps develop cutting-edge technology for all branches of the US military, and it would be a huge win if Rigetti Computing could win the quantum computing contract that DARPA is offering.

However, Rigetti Computing was excluded from the Stage B trial after participating in the Stage A trial. This is a sign that Rigetti is behind many of its peers, and investors do not want to own anything but the leader in this space.

So, is Rigetti headed toward $0? Maybe. If you continue on this path, you will eventually be able to reach that level. I think there are better quantum computing options available, such as IonQ. Investors should look at them first before betting on Rigetti. However, there is still a risk of reaching $0.

If you are looking for a much safer option, then a quantum computing ETF may be a better idea. These ETFs are filled with multiple companies, including big tech companies that have almost no chance of reaching $0.

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Keithen Drury has no position in any of the stocks mentioned. The Motley Fool has positions and recommends IonQ. The Motley Fool has a disclosure policy.

Will Rigetti Computing Stock Hit $0? was originally published by The Motley Fool