Image Source: Unsplash

With the parabolic rise of quantum computing specialist Rigetti Computing (RGTI), it’s difficult to find too many other mid-capitalization tech giants that can hold a candle to the blistering enterprise. Since the start of the year, RGTI stock has gained nearly 200%. Just in the trailing month, RGTI is up a stunning 176%. Still, the wild success raises serious sustainability concerns.

It’s enough to confuse leading experts in the financial analysis industry. Recently, Barron’s published an article warning that RGTI stock and peers like IonQ (IONQ) could be in a bubble. Such a perspective is hardly shocking. In addition to the performance stats mentioned earlier, RGTI also managed to deliver gains of nearly 378% in the trailing half-year period.

At some point, one would imagine that the good times will come to an end. It always does, right?

But that’s not necessarily the consensus. Despite the already-outrageous performance, some experts believe that RGTI stock has more fuel left in the tank. Still, it’s an incredibly risky proposition. Per TipRanks, the average 12-month price target sits at $26.42. At this level, it would imply a more than 41% haircut.

Adding to the dilemma is the streak performance. If the week were to end right now, RGTI stock would have printed five consecutive up weeks. Such streaks have only occurred four times and it’s been a 50/50 split as to what the next week’s result may reveal.

(Click on image to enlarge)

Quantitatively, RGTI stock is structured in an 8-2-U sequence: eight up weeks, two down weeks, with an overall upward trajectory across the period. Empirically, it’s difficult to make judgments on this accumulation-heavy sequence as it has only occurred nine times on a rolling basis. In contrast, there have been 214 weekly rolled (non-independent) sessions. As such, the 8-2-U is reflective of only 4.2% of all of RGTI’s behavioral states.

With that major caveat out of the way, past analogs show that RGTI stock tends to rise off this sequence — albeit in relatively modest fashion. It may not be the most compelling bull case available but there could still be some room left.

More By This Author: