Quantum Computing Reality Check: Rigetti Stock Plummets 49% After Nvidia CEO’s Sobering Timeline Prediction

In a dramatic turn of events, Rigetti Computing, Inc. (NASDAQ: RGTI) experienced a devastating blow to its stock value on Wednesday, with shares plunging by 49.4% to close at $9.30, down from its previous close of $18.39. This sharp decline came in response to sobering comments from Nvidia CEO Jensen Huang about the timeline for practical quantum computing applications.

During an analyst event at CES in Las Vegas, Huang suggested that “very useful quantum computers” might still be 15 to 30 years away from reality. He specifically noted that a 15-year timeline would be optimistic, while 30 years might be too conservative, settling on 20 years as a timeframe that “a whole bunch of us would believe”. This reality check triggered a sector-wide selloff, affecting multiple quantum computing companies.

The market reaction was particularly severe for Rigetti, as trading volume spiked by 18%, with approximately 174 million shares changing hands. The company, which currently maintains a market capitalization of $1.93 billion, has been experiencing significant volatility in recent months, highlighted by its P/E ratio of -26.42.

Recent insider activity has added to investor concerns. Major shareholder Bessemer Venture Partners X. L. sold over 1.2 million shares, while director Michael S. Clifton disposed of 125,000 shares in December. These moves, combined with Huang’s comments, have raised questions about the immediate future of quantum computing investments.

Despite the current market turbulence, Rigetti has made notable technological progress. In December 2024, the company launched its 84-qubit Ankaa-3 system, achieving impressive two-qubit gate fidelities of 99.5%. Looking ahead, Rigetti plans to introduce a 36-qubit system by mid-2025, constructed from four 9-qubit chips, with a targeted 2x reduction in current error rates.

The quantum computing sector had enjoyed substantial gains throughout 2024, with Rigetti’s stock surging by approximately 313% within a month prior to this correction. The optimism was partly fueled by developments such as Google’s breakthrough with its Willow chip, which demonstrated significant error reduction improvements over its 2019 predecessor.

Institutional investors have shown mixed sentiment toward Rigetti. While some firms like Caprock Group LLC and Arete Wealth Advisors LLC have initiated new positions, others have made more modest adjustments to their holdings. Currently, hedge funds hold 35.38% of Rigetti’s shares, indicating a moderate level of institutional confidence.

The dramatic stock decline has attracted attention from law firms. Rosen Law Firm announced an investigation into potential securities claims on behalf of Rigetti shareholders, citing concerns about potentially misleading business information provided to investors.

Despite the current market pessimism, Rigetti remains committed to advancing quantum computing technology. The company continues to focus on developing superconducting quantum processors and expanding its quantum computing as a service (QCaaS) offerings. Their collaboration with Riverlane on fault-tolerant quantum computing and error correction demonstrates ongoing progress in addressing key technical challenges.

The quantum computing sector’s future remains uncertain, with a clear disconnect between near-term market expectations and the technology’s practical implementation timeline. While Rigetti and its competitors continue to make technological advances, Huang’s comments serve as a reminder that the path to commercially viable quantum computing may be longer than many investors had anticipated.