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The Quantum Computing Stock Insiders Are Quietly Buying
Key Points
Rigetti Computing is the hottest quantum stock on the market right now.
Major players like Vanguard and BlackRock are buying in -- and buying more.
Meanwhile, Rigetti's sales are down, and profits remain a long way off.
The past year has been a good time to own quantum computing stocks.
Shares of Arqit Quantum (NASDAQ: ARQQ) are up 17% in the past year, beating the comparable 13.3% performance of the S&P 500. IonQ (NYSE: IONQ) saw its stock price rise 67% over the past year, and Quantum Computing (NASDAQ: QUBT) is up more than 7x as much as that, at 120%.
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But do you know who's done better than these quantum computing stocks? And do you know who's been attracting the most buying by insider investors even after its stock has gotten a lot more expensive this year?
That would be Rigetti Computing (NASDAQ: RGTI), up 855%, and the target of massive buying by shareholders including American Assets Investment Management, the Vanguard Group, and BlackRock.
Image source: Getty Images.
Look who's buying Rigetti stock now
According to SEC filings, all three of these investment firms first discovered and began buying into Rigetti stock earlier this year, with American Assets taking a 2.6% stake, Vanguard buying 7.1%, and BlackRock 5.3%. Both Vanguard and BlackRock even continued buying, raising their stakes to 9.9% and 6.4%, respectively.
Combined, the three firms now control nearly 20% of Rigetti's shares outstanding. But should you join them?
Not necessarily. Despite the stock's strong performance, I think these insiders are actually wrong to be buying Rigetti.
Why do I say this? On the one hand, yes, Rigetti has become a very popular quantum stock this year -- but not because its business has improved.
Contrary to what you might expect from a growth stock, Rigetti's sales aren't rising. They're shrinking, with trailing-12-month revenue down 43% from 2022 levels. At the same time, Rigetti's annual losses have quintupled over the last three years, to more than $350 million -- and most analysts polled by S&P Global Market Intelligence agree Rigetti will keep on losing money for at least the next five years, and possibly even longer.
That doesn't seem to worry the insiders who are buying into Rigetti stock's rally. But it should probably worry you.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends IonQ and S&P Global. The Motley Fool recommends BlackRock. The Motley Fool has a disclosure policy.