The preferred development inventory purchased by Hargreaves Lansdown clients final week was MicroStrategy. In second and third place had been Nvidia and Tesla, respectively. No surprises there then.

Nevertheless, the fourth most purchased share was maybe a bit of extra eye-raising. It was Rigetti Computing (NASDAQ: RGTI), a comparatively obscure quantum computing start-up whose shares are up by a mind-boggling 1,768% in simply six months.

Might this $17 inventory make me wealthy by investing in it at the moment? Right here’s my take.

The following huge factor, probably

Quantum computing has captivated buyers’ imaginations just lately. This comes after Google launched information final month of a brand new quantum chip, referred to as Willow, which the tech agency stated “paves the way in which to a helpful, large-scale quantum laptop“.

A quantum laptop harnesses quantum mechanics — the weird behaviour of subatomic particles — to unravel issues a lot quicker than conventional computer systems.

For instance, Google claimed Willow solved in 5 minutes a computational drawback that will take the world’s quickest supercomputers 10,000,000,000,000,000,000,000,000 years to complete. That’s greater than the age of the universe!

The trade stays primarily within the research and improvement (R&D) stage, with quantum computer systems nonetheless very susceptible to errors. Nevertheless, analysts at McKinsey see it will definitely including $1.3trn in worth to the worldwide financial system by 2035.

Capital-intensive trade

Rigetti is a quantum computing firm that builds {hardware} and operates a platform referred to as Quantum Cloud Providers. Therefore the investor enthusiasm recently.

Digging into the agency although, that is the place the thrill stops for me. That’s as a result of Rigetti solely reported $2.4m in income for Q3, which was truly down 23% 12 months on 12 months. For all of 2024, analysts anticipate the agency to generate income of round $11m, representing an 8% decline.

Nevertheless, because the enterprise scales, the highest line is forecast to rise 47% to $16m in 2025, then one other 121% to $35.4m in 2026. Naturally, the agency isn’t but worthwhile and posted an working lack of $17.3m for Q3.

Whereas it had a seemingly respectable money place of $92.6m in September, I do fear how lengthy that can final earlier than the agency must faucet shareholders for more cash.

In any case, R&D prices on this nascent trade are important. And Rigetti plans to launch a 36-qubit system in mid-2025 and a 100+ qubit system by the tip of the 12 months.

Qubits, quick for quantum bits, are the basic items of data in a quantum laptop. Typically, the extra qubits a system has, the higher its potential computing energy (offered they’re secure and never susceptible to errors).

Nevertheless, one thing the agency stated in its newest quarter additionally worries me: “We believe quantum computers capable of addressing real-world problems will require hundreds to thousands of high-performing qubits.”

Tons of to 1000’s? That sounds a good distance off and can seemingly want a ton of money to attain.

Will I make investments?

The corporate is known as after founder Chad Rigetti, a physicist who beforehand labored on IBM‘s quantum computers. However, he abruptly resigned in December 2022. For a start-up like this, I’d ideally need the founder to be concerned.

At $17, the inventory is buying and selling at 272 instances this 12 months’s forecast gross sales, which means the speculative share is extraordinarily overvalued.

Maybe Rigetti proves to be the subsequent Nvidia-type millionaire-maker. But it’s far too dangerous for me proper now.