This Quantum Computing Penny Stock is Down 16% in Early Trading, Here’s Why

Quantum computing stocks have soared recently after tech giant Amazon (AMZN) announced the launch of its Quantum Embark program, designed to help introduce customers to the technology, explain relevant use cases, and seamlessly onboard. After soaring 109% in the last four sessions, it looks like quantum computing penny stock Rigetti Computing (RGTI) is taking advantage of the surge in its share price to bulk up its balance sheet.

Rigetti said today it has priced 50 million shares of common stock at $2.00 each - a discount of more than 27% to Monday’s close - in an offering that generated gross proceeds of $100 million. The funds will be used for working capital and general corporate purposes, per the company.

“With the anticipated net proceeds from this offering and cash on hand, the Company believes it will be adequately funded to continue its current technology development and on-premises quantum computer business strategy without the need to raise additional capital,” said Rigetti via a press release.

RGTI stock is down about 16% out of the gate this morning. The “Strong Buy”-rated stock finished Monday at $2.75, very close to Wall Street’s average price target of $2.88. The 14-day Relative Strength Index (RSI) for RGTI was 79.68 at Monday’s close, indicating that the shares may be due to correct a short-term overbought situation. 

For investors with the appropriate risk tolerance and a long-term time horizon, the sharp pullback in RGTI could present a buying opportunity in this volatile quantum computing stock - which, as today’s price action indicates, carries a significant degree of risk alongside its outsized upside potential.

This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.