Comparing Artificial Intelligence Stocks: Rigetti Computing and Nvidia

Overview of Two Tech Stocks: Rigetti Computing and Nvidia

Currently, two tech stocks are gaining attention: Rigetti Computing (RGTI) and Nvidia (NVDA). Rigetti specializes in quantum computing hardware and software, while Nvidia is renowned for its semiconductor products, particularly those used in artificial intelligence (AI). Nvidia’s influence in the booming AI market is more straightforward, yet Rigetti also plays a role by integrating its quantum technology into AI systems.

Both companies have experienced significant stock price increases over the past three years. Rigetti has risen by 34%, while Nvidia’s stock has skyrocketed by 342%. By comparison, the S&P 500 index only grew by 15%. This raises the question: which stock is a better choice for long-term investors focused on AI?

Nvidia: The AI Leader

Nvidia has established itself as a leader in the AI market, and its growth is linked to rising data center investments. Major tech companies have increased their spending in this area, aiming to assert their dominance in AI developments. This surge in investment has led to a dramatic increase in demand for Nvidia’s processors.

In fiscal 2025, Nvidia’s data center revenue soared 142% to reach $115 billion, and its non-GAAP earnings rose by 130% to $2.99 per share. The company’s market presence is impressive, with estimates suggesting it holds between 70% to 95% of the AI data center processing market.

Nvidia’s CEO, Jensen Huang, predicts a future where tech companies will spend around $2 trillion on AI data centers. This forecast indicates ongoing strong demand for Nvidia’s advanced processors, including their latest AI processor, Blackwell, which has generated $11 billion in sales in its early phase, marking the company’s fastest product ramp-up to date.

Rigetti: The Quantum Computing Challenger

In contrast, Rigetti Computing operates in the realm of quantum computing, a field that has the potential to revolutionize various sectors, from material science to healthcare. Unlike traditional computers that process binary bits, quantum computers utilize qubits, enabling them to compute multiple possibilities at once, albeit sometimes less accurately.

Rigetti develops hardware, software, and quantum cloud computing systems, applying its technology to a market projected to reach $170 billion by 2040. The company’s strategy includes partnerships with prominent cloud providers such as Amazon and Microsoft, enhancing its credibility and showcasing practical applications beyond theoretical concepts.

However, recent financial results for Rigetti paint a concerning picture. Sales plummeted by 32% in the last quarter, totaling just $2.3 million. This decline raises questions about the company’s future, particularly as it competes in a speculative market. Despite a staggering 639% surge in stock price over the past year, Rigetti’s valuation poses concerns with a high price-to-sales ratio of 147. Investors are currently paying a premium for a company that is struggling with declining revenues and depending on an uncertain market.

Comparative Outlook

In an environment of economic uncertainty, driven by various external factors such as tariffs, investors must approach stock evaluations with caution. Regardless of the concerns, Nvidia stands out as the preferred choice for those looking at AI investments. Even amidst a potential economic slowdown, Nvidia’s solid foundation in the AI processor market and ongoing demand for its chips remain reliable indicators of future success.

On the contrary, while Rigetti Computing holds promise in the realm of quantum technology, the company’s current financial struggles and high stock price make it a riskier investment. The potential of quantum computing is vast; however, it may still take years before the technology demonstrates its practical benefits. Given its recent revenue decline and speculative nature, investors might want to consider staying away from Rigetti’s stock for now.