At the end of 2024, the development of quantum computing technologies seemed to have reached a breakneck pace. The race to develop this promising, game-changing technology only seems to be accelerating. Big tech players Alphabet Inc. dominated some of the headlines. NASDAQ: GOOGFor example, in early December the company announced the release of its Willow chip, which can perform calculations in about five minutes that would take non-quantum supercomputers a staggering 10 septillion years to complete.
Up-and-coming entrants into the quantum space are also making waves. Quantum Computing Inc. NASDAQ:CUBE announced a major contract with NASA in mid-December. In response, QUBT shares have skyrocketed, rising more than 450% in the past month to December 19th. As a result, their annual compounded return on the same day was a whopping 1,420%.
The excitement around quantum computing stocks has spread to names that aren’t as well known. In particular, two companies – Rigetti Computing Inc. NASDAQ: RGTI and Arqit Quantum Inc. NASDAQ: ARQQ— might be worth keeping in mind for investors looking to expand their exposure to this fast-growing industry.
Righetti: The path to profitability, but risky
it’s hardly possible to say that The market completely missed Righetti last year. Shares in the quantum processor maker are up nearly 585% in the year to December 19, 2024—a huge growth rate, although it still lags far behind rival Quantum Computing. Almost all of these gains were achieved in the final weeks of the year.
Righetti Computers Today
Discards calculations
(As of 11:39 a.m. ET)
- 52 week range
- US$0.66
▼
$12.75
- Target price
- US$4.80
On paper, Righetti’s recent growth appears to have catapulted the company into overvalued territory. The P/S ratio of 172.9 suggests investors may be overpaying for a firm whose sales have yet to grow. Additionally, the company is not yet profitable, reporting a net loss of more than $14 million for the third quarter.
However, what may convince investors to buy RGTI stock, even despite its recent runup, is the path to profitability. The firm ended the third quarter with nearly $93 million in cash or cash equivalents, providing enough cash to expand operations while it puts the finishing touches on the systems, slated for release in 2025. Rigetti’s expected launches next year include both a 36-qubit and a 100-qubit system based on superconducting qubit technology, which uses established semiconductor design processes. If these launches are successful, the recent rally could be just the beginning of a longer upward trajectory.
However, investing in Rigetti while the share price is so high and before the company reaches profitability is inherently risky. More cautious investors might be better off comparing Righetti to a well-established large technology firm that has a growing quantum computing business.
Arkit: Many important events will happen in 2024
Arqit’s participation in the quantum space is unique: the firm provides a cloud-based, subscription-based quantum encryption service to protect data transmissions with a high level of security. The stock is up more than 124% for the year ending Dec. 19, 2024.
Arkit Quantum today
(As of 11:40 a.m. ET)
- 52 week range
- $3.72
▼
$42.90
- Target price
- $27.00
Arcite’s year has been incredibly busy. The firm reported modest revenue of less than $300,000 for fiscal 2024, which ended Sept. 30. However, it appears poised for significant revenue growth, given that the company recently signed a multi-year contract with an unnamed government in the EMEA region. Annual recurring revenue is expected to be in the seven figures.
The company has implemented cost-cutting measures to help it reduce the impact on its modest cash position of less than $19 million as of its fourth-quarter earnings report. Additionally, the company completed a 25-for-1 reverse stock split in September, the same month it named a new CEO. Given all this turmoil at the company, investors will likely be watching for signs of stability in the new year.
Arqit’s technology appears to be gaining traction and interest in contracts is growing. However, the firm is still burning through money at a rapid pace and has yet to achieve sustainable revenue and profit levels sufficient to sustain operations at that pace over the long term. However, investors with a long horizon and a high tolerance for speculative investments may be rewarded for their early interest in this quantum cloud computing company.
Before you consider Arqit Quantum, you should hear this.
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