Rigetti Computing (RGTI) stock plummeted 10.45% in pre-market trading on Monday, following a broader sell-off in the quantum computing and related sectors over the weekend. The decline was fueled by concerns over the company's uncertain earnings prospects and China's reported progress in developing powerful AI models using less expensive chips.
Reports emerged that DeepSeek, a Chinese AI lab, released a powerful AI model that it claims was built for just $6 million using less-powerful chips. This development raised concerns about the potential impact on demand for expensive AI chips and related hardware, leading to a sell-off in chip stocks, quantum computing stocks, and other related sectors.
Rigetti Computing's stock price decline was also influenced by broader market concerns surrounding the company's ability to generate consistent earnings in the highly competitive quantum computing industry. Prominent financial analyst Jim Cramer advised investors to stay away from the stock, citing uncertainty over when the company would become profitable.
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