Rigetti Computing (RGTI -2.58%) took investors on a wild ride since its public debut three years ago. The quantum computing company went public by merging with a special purpose acquisition company (SPAC), and its stock opened at $9.75.
But by May 3, 2023, its stock sunk to an all-time low of $0.38. Like many other SPAC-backed start-ups, Rigetti overpromised and underdelivered. It only generated $13 million in revenue in 2022, compared to its original forecast of $18 million, and its founder Chad Rigetti unexpectedly stepped down as its president, CEO, and director that December.
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But as of this writing, Rigetti's stock has bounced back to about $9. A $50,000 investment in its record low would be worth $1 million today. The bulls rushed back as it rolled out new chips and systems, attracted more customers as a "one-stop shop" for quantum chips, systems, and cloud services, and set a clearer roadmap for its future.
Over the past few months, Rigetti launched its Novera QPU, a 9-qubit commercial version of its quantum computer which costs about $900,000, and deployed its first 84-qubit Ankaa-3 quantum computing system. It also revealed its plans to launch a modular 36-qubit system this year, a non-modular 100 qubit system in 2026, and a 336-qubit system within the next few years. Meanwhile, the market's renewed interest in quantum computing stocks drove away the bears and lifted Rigetti's stock again.
If everything goes right, analysts expect Rigetti's revenue to rise 30% in 2025, 140% in 2026, and 48% to $50 million in 2027. But with an enterprise value of $2.83 billion, it's already valued at a whopping 57 times its projected sales for 2027.
That nosebleed valuation could limit its upside potential and set it up for a steep drop in a market downturn. So instead of chasing Rigetti at these bubbly levels, investors should consider another millionaire-maker tech stock that is still trading at more reasonable valuations: the AI chip leader Nvidia (NVDA 1.55%).
Why it's time to revisit Nvidia
If you had invested $50,000 in Nvidia 10 years ago, your investment would be worth more than $10 million today. The chipmaker generated those millionaire-making gains for its investors by expanding its market-leading gaming GPU business and rolling out AI-oriented data center GPUs long before other chipmakers paid attention to the nascent market.
Unlike CPUs, which process individual pieces of data through scalar processing, GPUs crunch a wide range of integers and floating-point numbers simultaneously through vector processing. That's why Nvidia's high-end data center GPUs can handle complex machine learning and AI tasks more effectively than stand-alone CPUs.
NASDAQ: NVDA
Key Data Points
Nvidia now holds a near-monopoly in the data center GPU market, and all of the world's top AI companies -- including Microsoft, Amazon, Meta Platforms, and OpenAI -- are loading up on its chips. That's why its revenue more than doubled in both fiscal 2024 and fiscal 2025 (which ended this January). From fiscal 2025 to fiscal 2028, analysts expect its revenue and EPS to both increase at a compound annual growth rate (CAGR) of 31%.
Those are stunning growth rates for a stock that trades at 27 times next year's earnings -- even though it's already the world's second-most valuable company with a market cap of $2.9 trillion. Nvidia's stock pulled back 10% over the past three months amid concerns about tighter export curbs against China, higher tariffs, and other macro headwinds, but it should remain the top seller of picks and shovels for the AI gold rush.
As for potential competition from quantum computing systems, Nvidia CEO Jensen Huang predicts it could take 15 to 30 more years for "very useful quantum computers" -- which would require a million more qubits than today's systems -- to hit the market. Therefore, Nvidia could still have plenty of room to run as the AI market expands and evolves. Its massive size might prevent it from churning out more millionaire-making gains from modest investments over the next decade, but it certainly looks like a more reliable investment than Rigetti -- which has far too much growth baked into its sky-high valuations.
