Why Rigetti Computing Stock Is Soaring Today The Motley Fool

Bullish comments on quantum computing’s potential from Microsoft's CEO boosted quantum stocks. CEO Satya Nadella called quantum computing "the next big accelerator" in the cloud. Investors should remain cautious; quantum technology’s commercial viability could still be a long way off. Shares of Rigetti Computing(NASDAQ: RGTI) are jumping on Thursday. The quantum computing start-up's stock rose 4.8% as of 3:30 p.m. ET, but was up as much as 12.6% earlier in the day.

The rise comes as the S&P 500(SNPINDEX: ^GSPC) was flat and the Nasdaq Composite(NASDAQINDEX: ^IXIC) rose 0.2%. Rigetti and other quantum stocks saw a boost after Microsoft's earnings call, in which the tech giant's CEO called out quantum computing as "the next big accelerator" in cloud computing. A Wall Street firm maintained its buy rating on the stock and raised its price target. This article first appeared on our U.S. website. Shares of Rigetti Computing (NASDAQ: RGTI) were trading 10% higher as of 3 p.m.

ET Monday, after a Wall Street analyst raised his price target on the stock and reiterated a buy rating for the quantum computing company. Needham analyst Quinn Bolton increased his price target on Rigetti by $3 to $18 per share, implying about 15% upside from current levels. Bolton believes there is momentum in the quantum computing sector. He is specifically watching the Defense Advanced Research Projects Agency’s (DARPA) Quantum Benchmark Initiative (QBI) and a pending bill in Congress called the Department of Energy Quantum Leadership Act. An independent research and development (R&D) agency stashed within the U.S. Department of Defense, DARPA was created in response to the launch of Sputnik in 1957 and works to ensure the country is always prepared to “face a strategic technical surprise.” QBI’s goal is to...

The initiative is currently in stage A. Analysts at Needham think momentum in the space is building. They see federal programs and a pending bill in Congress as pathways to more funding for the sector. Shares of Rigetti Computing (NASDAQ: RGTI) traded nearly 10% higher, as of 10:49 a.m. ET today, after a Wall Street analyst raised his price target on the stock and reiterated a buy rating on the name. Where to invest $1,000 right now?

Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Needham analyst Quinn Bolton increased his price target on Rigetti by $3 to $18 per share, implying about 15% upside from current levels. Bolton believes there is momentum in the quantum computing sector. He is specifically watching the Defense Advanced Research Projects Agency's (DARPA) Quantum Benchmark Initiative (QBI) and a pending bill in Congress called the Department of Energy Quantum Leadership Act. This data feed is not available at this time.

Rigetti Computing, Inc. (RGTI Quick QuoteRGTI - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future. Over the past month, shares of this company have returned +0.7%, compared to the Zacks S&P 500 composite's +3% change. During this period, the Zacks Internet - Software industry, which Rigetti Computing falls in, has gained 7.9%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually... Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings. We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher.

This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

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