Quantum computing hype drives Rigetti bubble
The speaker argues that Rigetti Computing is a speculative bubble where the stock price has decoupled from deteriorating financial fundamentals.
The argument
The speaker notes that despite a 12x run-up in its share price, Rigetti's revenue, EPS, and margins have steadily declined since 2022. This disconnect suggests investors are relying on hope and the greater fool theory rather than intrinsic value.
The thesis, stress-tested
✓ What validates it
- ✓Continued decline in revenue and EPS in upcoming quarterly earnings reports
- ✓A contraction in retail trading volume or search interest for quantum computing
▸ Risks discussed
- ▸Speculative retail momentum can sustain high valuations longer than expected
- ▸Breakthroughs in quantum computing technology could validate the valuation retrospectively
Hear it yourself
"choice. The truth is, I want to understand this framework better so that I can protect myself. I never want to be the investor, you know, holding the bag after 90% drawdown when it was very obvious that the stock's price was rising much faster than intrinsic value would have indicated. And since these bubbles tend to follow very predictable patterns, patterns that are outlined incredibly well in this book, I think that recognizing them isn't just some sort of academic exercise, but that it's key to long term survival."
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