Buy this quantum computing stock that can rally more than 30%, Cantor says

Cantor Fitzgerald initiated coverage on Rigetti Computing (RGTI) with an Overweight rating and a $15 price target, suggesting 32.4% upside. Analyst Troy Jensen views quantum computing as a nascent but strategically vital technology with enormous economic implications, positioning Rigetti as a leading pure-play in superconducting technology, bolstered by its partnership with Quanta. While acknowledging current high valuations disconnected from near-term forecasts, Jensen asserts the technology's long-term strategic value justifies the upside, even as RGTI shares have pulled back 25% year-to-date following a substantial 2024 surge.

Analysis

Cantor Fitzgerald's initiation of coverage on Rigetti Computing (RGTI) with an Overweight rating and a $15 price target introduces a new bullish catalyst for the stock, suggesting a 32.4% potential upside. The core of the thesis rests on the long-term, high-impact potential of quantum computing, positioning Rigetti as the leading pure-play in the heavily invested superconducting technology segment. This leadership claim is further substantiated by its strategic partnership with Quanta. The bullish sentiment is echoed across the analyst community, with LSEG data showing a consensus buy-equivalent rating from all six covering analysts. However, the analysis is tempered by the acknowledgment of significant risks, including the nascent state of the technology, which is likely years from full-scale deployment, and valuations that are admittedly disconnected from any near-term financial forecasts. This context is critical given the stock's recent performance, which includes a more than 25% year-to-date decline following a nearly 1,450% surge in 2024, underscoring its inherent volatility and speculative nature.

Key Decisions for Investors

• Investors with a high-risk tolerance and a long-term investment horizon may consider the recent 25% pullback as a potential entry point, given the strong analyst consensus and Rigetti's strategic positioning in a potentially transformative industry.
• Portfolio managers should weigh the significant upside potential outlined by the $15 price target against the stock's noted volatility and the fact that its valuation is based on long-term technological promise rather than near-term business fundamentals.
• It is crucial to monitor milestones related to Rigetti's superconducting technology and its partnership with Quanta, as progress in these areas is a key pillar of the bull thesis and will likely be a primary driver of future stock performance.