Rigetti Turned $10,000 Into Over $81,000 in 3 Years -- and It's Still 73% Off Its High. Here's Why I Still Wouldn't Touch It.

Rigetti Computing (NASDAQ:RGTI) has turned a $10,000 investment made three years ago into over $80,000. That's a more than 700% return, even though it's currently 73% off its peak during that period.

Despite the current price discount, I still wouldn't touch the quantum computing stock. Here's what's driving the stock, and why it's not right for me.

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Not the right combination for my situation

Rigetti Computing went public in early 2022 after completing its merger with a special purpose acquisition company, valuing the quantum computing start-up at $1.5 billion. It languished for a few years before taking off in late 2024, due to growing investor optimism in the sector. At one point, the stock was up about 3,000% from its low point in late 2023. While the quantum computing stock has come down sharply from that euphoric peak as investors have tempered their expectations, it's still worth over $5 billion.

That nauseating volatility is one reason why I won't touch Rigetti Computing stock. I'm starting to position my portfolio to support an early retirement and want to reduce its volatility.

A couple of factors are driving that volatility. Rigetti is still a very early stage company. It reported only $5.1 million in revenue during the second quarter, while its operating loss totaled $28.1 million. As a result, it's burning through cash ($32 million in net cash used in operating activities during the first six months of this year). On a more positive note, the company ended the second quarter with $541 million in cash and available short-term investments, giving it a strong position to continue funding its growth. It also signed a letter of intent with the U.S. Department of Commerce for up to $100 million in funding over three years to accelerate superconducting quantum computing research and development. However, with no profit and low revenue, Rigetti trades at a nose-bleed valuation at more than 375 times sales.

While Rigetti Computing has tremendous promise, its volatility, money-losing business, and sky-high valuation aren't right for my situation. That's why I won't touch the stock despite the big drop from the peak.

Matt DiLallo 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.