RGTI charges today towards another all-time high, should you sell?

Rigetti Computing (RGTI) continued to rise spectacularly on Friday, with shares seen increasing by more than 13% to $17.53 during morning trading.

The gain follows a record close at $15.44 on Thursday, marking the fifth consecutive session of gains for the quantum-computing services company.

Rigetti’s shares have skyrocketed more than 1,794% this year, a movement that has placed the company for its best annual performance on record.

The surge is a significant comeback for a stock that, until mid-December, had remained below $1 for extended periods.

Rigetti, which debuted on the Nasdaq in March 2022 after a SPAC merger, initially reached highs of $11.37 but struggled to regain those levels until this year’s rally.

Now, as it continues its rally, the stock may hit another all-time high on Friday.

Rigetti rises as part of a broader rally in quantum computing stocks

Rigetti’s unprecedented rise reflects the broader rally being witnessed by quantum computing stocks, and investor enthusiasm for the sector.

The share price of Quantum Computing (QUBT) climbed by 6.4% before losing the gains and slipping into the red, while D-Wave Quantum (QBTS) gained 2.53%.

QUBT has gained more than 2,006% YTD.

Quantum Corp. (QMCO) and Quantum-Si (QSI) surged by 6.2% and 68.9%, respectively.

What’s driving market excitement for Rigetti is its ambitious technological roadmap.

The company plans to deploy a 36-qubit system by mid-2025, using its proprietary superconducting qubit technology, which offers gate speeds of 60 to 80 nanoseconds—far outpacing competitors.

A larger, 100-plus-qubit system is also planned for later in 2025.

Analyst forecasts for the quantum computing market

Rigetti’s Q3 revenue remained modest at $2.4 million, but the company’s $92.6 million cash position provides a solid foundation for executing its vision.

Analysts see quantum computing as a transformative technology with vast potential, supported by McKinsey’s forecast that the market could reach $45 billion to $131 billion by 2040.

With its recent achievements and ambitious plans, Rigetti is emerging as a leader in a rapidly expanding field, signalling a bright future for quantum computing innovation.

Former Rigetti executive sells into its strength

Rigetti’s strong rally prompted at least one investor to sell into its strength.

Former General Counsel of Rigetti, Richard Danis sold 624,262 shares in December, earning $4.7 million, according to filings with the Securities and Exchange Commission.

His transactions included a sale of 233,423 shares on Monday, Dec. 23, for $2.6 million at an average price of $11.03 per share.

Danis had also indicated plans to sell an additional 250,000 shares at $11 per share, a transaction that would net $2.8 million.

Danis resigned from his role on Nov. 30, and Rigetti confirmed to Barron’s that his post-resignation consulting agreement was terminated by mutual agreement earlier this month.

Should you sell too?

According to Crispus Nyaga, financial analyst at Invezz, there are compelling reasons to sell quantum stocks like RGTI, QSI, and others. He says,

The first major reason to sell quantum computing stocks like Rigetti Computing, Quantum Corporation, and IONQ is that major themes often don’t work out in the long term. This performance is mostly because the market is usually driven by fear and greed.

Nyaga has compared the current sentiment to the initial surge seen in cannabis and electric vehicle stocks which plunged after seeing a hype.

Secondly, according to Nyaga, the Wyckoff method shows that stocks will crash due to a concept called mean reversion.

“This situation is where stocks and other assets drop and return to their mean levels after a strong surge.

This means the reversion concept has recently worked well in the crypto industry.”

Additionally, their stocks have become highly overbought as their Relative Strength Index (RSI) and Stochastic Oscillators have soared, he says, adding stocks often retreat when they become highly overbought.

Lastly, he says, quantum computing stocks will crash because their valuation metrics have become highly stretched in the past few months. 

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