Why Rigetti Computing Stock Is Skyrocketing Today

Key Points

• The company announced it has achieved a milestone in reducing its "gate errors."

• Rigetti is working on a promising technology, but investors should know it's many years from maturation.

• 10 stocks we like better than Rigetti Computing ›

Shares of Rigetti Computing (NASDAQ: RGTI) are soaring on Thursday. The company's stock has jumped 28.9% as of 1:38 p.m. ET. The spike comes as the S&P 500 and Nasdaq Composite are mostly flat.

The quantum computing pioneer announced it has achieved a significant milestone in its development of commercially viable quantum computing.

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Rigetti says its "gate fidelity" has improved

The company announced that it ha achieved "99.5% median two-qubit gate fidelity on its modular 36-qubit system," which it says means it has cut its error rate in half compared to its previous record. Gate error is a major barrier to quantum computing achieving viability outside the lab. While 99.5% accuracy seems high, a classical computer has an error rate many, many orders of magnitude lower.

Image source: Getty Images.

Rigetti has a long way to go

While this is a step forward, I think investors are getting ahead of themselves. Rigetti and other quantum companies are working to develop a breakthrough technology on the bleeding edge of science, and there is ample reason to believe -- despite what the leaders of these companies say -- that we are a decade or so out from true commercial application of these technologies on the scale that would justify the investment.

If you are an investor with a particularly high risk tolerance and the ability to wait a decade or more for your investment to pay off, Rigetti is one of the better quantum computing stocks on the market. However, I would strongly suggest spreading your investment among many quantum stocks. The technology's maturation is just too far off for us to be able to tell which company's approach will work, and there is always the chance that the technology never matures to the point of viability.

For my money, Rigetti and other quantum stocks are too pricey for where the technology is in its development.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.