Why Rigetti Computing Stock Keeps Going Up
Key Points
Nvidia's new Ising AI accelerates the speed at which quantum computer outputs get debugged.
Rigetti stock has been rising in hope this will also accelerate its race to profitability.
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For the fourth day in a row, Rigetti Computing (NASDAQ: RGTI) stock is flying.
Shares of the third-biggest name in quantum computing systems (behind IonQ (NYSE: IONQ) and D-Wave (NYSE: QBTS), but ahead of the eponymous Quantum Computing (NASDAQ: QUBT) stock) soared 11.3% through 11:25 a.m. ET Wednesday as it continued to ride a wave of enthusiasm from Nvidia's (NASDAQ: NVDA) announcement yesterday.
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Image source: Getty Images.
Nvidia's big news
Yesterday, as you may have heard, AI powerhouse but quantum newcomer Nvidia (NASDAQ: NVDA) announced a new Nvidia Ising AI model designed to improve quantum computer performance and correct errors in quantum computer output. Rather than compete directly with quantum companies like Rigetti, IonQ, and D-Wave, Nvidia wants to insert itself in the supply chain with a product that helps quantum computers work better.
According to Nvidia CEO Jensen Huang, Ising can correct quantum computer output errors up to 3x faster than the "traditional approaches" quantum companies have been using. The result: "large-scale, reliable [quantum] computers" that customers will pay money to use.
What does this mean for Rigetti stock?
If Huang is right -- and if Nvidia delivers on Ising's promise -- Nvidia is offering quantum stocks the chance to become profitable ahead of schedule. That should be an attractive offer for Rigetti, which is currently burning nearly $63 million in cash a year, and not expected to become consistently profitable until sometime in the 2030s, according to analysts polled by S&P Global Market Intelligence.
Admittedly, Nvidia is also asking Rigetti and its quantum peers to share some of the quantum wealth. But again, if Huang is right, the quantum market could reach $11 billion in global revenue by 2030. That's a big pot of money -- more than enough to share.
Again, assuming Ising works.
Should you buy stock in Rigetti Computing right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends IonQ and Nvidia. The Motley Fool has a disclosure policy.
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