Why Is Rigetti Computing Stock on the Move Today?
Key Points
A Wall Street Journal article sent Rigetti and other pure-play quantum stocks soaring.
Subsequent reporting from Reuters and Yahoo! Finance raised doubts about the initial report.
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Shares of Rigetti Computing (NASDAQ: RGTI) soared 16.4% on Thursday before reversing, now up a more modest 6.5% as of 1:51 p.m. ET. The spike comes as the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 0.6% and 0.9%, respectively.
The quantum computing company's stock surged after The Wall Street Journal reported that the Trump administration was in talks with Rigetti and others about taking equity stakes in the companies.
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The stock retreated from its peak earlier today, however, after both Reuters and Yahoo! Finance were unable to corroborate the story and were told by an official from the U.S. Commerce Department -- the department the WSJ reported was overseeing the talks -- that it is "not currently negotiating with any of the companies."
The possibility that talks are not taking place poured cold water on Rigetti's run-up.
Image source: Getty Images.
Rigetti's stock is inflated
Pure-play quantum computing stocks have exploded over the last year as enthusiasm for the emerging technology grows. While the technology has great potential, I think investors are getting ahead of themselves.
At this point, Rigetti's $12.4 billion market capitalization is divorced from reality; the company has trailing-12-month revenue of less than $8 million and is burning cash.
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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.
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