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Luke Kawa

Rigetti Computing gains as Benchmark raises price target to a new Wall Street high of $50

Rigetti Computing is advancing in premarket trading after Benchmark analyst David Williams more than doubled his price target on shares of the quantum computing company to $50 from $20.

He cited the company’s recent announcement of two systems sales and a contract with the Air Force Research Laboratory as proof points on Rigetti’s execution that justify his bullish call.

Williams wrote that the “combination of government grants and public hardware sales signal increasing confidence in its technical roadmap and strategic positioning within the broader quantum computing ecosystem,” adding that “recent hardware sales are a significant validation of public adoption momentum beyond academia and government funded research and development initiatives.”

Among the seven analysts who cover the stock and are tracked by Bloomberg, Williams is the only one who has a price target higher than where the stock is currently trading — despite all seven having a “buy” rating!

Per Williams:

“Rigetti’s vertically integrated model, strong IP portfolio, and strategic ecosystem partnerships provide meaningful differentiation, positioning the company to compete effectively against much larger peers such as IBM and Google.”

“While management views that full-scale commercialization as several years out, from our perspective, Rigetti has one of the most defensible and scalable paths forward, supported by its patented chiplet and I/O architecture, which should accelerate progress toward quantum advantage.”

Quantum stocks have been on fire lately, first on a smattering of company-specific news, second on rumors of looming government support for the industry that paid off when the Trump administration called the technology an R&D priority, and more recently, mostly on thin air as their momentum continues.

“For now, momentum remains on the side of investors, and as long as the industry continues to deliver measurable technical and commercial progress, we believe the quantum theme should remain resilient, even amid broader market volatility,” Williams concluded.

“Rigetti’s vertically integrated model, strong IP portfolio, and strategic ecosystem partnerships provide meaningful differentiation, positioning the company to compete effectively against much larger peers such as IBM and Google.”

“While management views that full-scale commercialization as several years out, from our perspective, Rigetti has one of the most defensible and scalable paths forward, supported by its patented chiplet and I/O architecture, which should accelerate progress toward quantum advantage.”

Quantum stocks have been on fire lately, first on a smattering of company-specific news, second on rumors of looming government support for the industry that paid off when the Trump administration called the technology an R&D priority, and more recently, mostly on thin air as their momentum continues.

“For now, momentum remains on the side of investors, and as long as the industry continues to deliver measurable technical and commercial progress, we believe the quantum theme should remain resilient, even amid broader market volatility,” Williams concluded.

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Luke Kawa

Oracle tumbles after report that it’s lost nearly $100 million from renting out access to Nvidia’s Blackwell chips

You buy Nvidia’s flagship chips because they’re supposed to be best-in-class, empowering you to build better AI capabilities or make lots money off other companies that want to harness the power of the AI boom.

Not quite, per this report from The Information, whose final paragraph begins with this line:

“In the three months that ended in August, Oracle lost nearly $100 million from rentals of Nvidia’s Blackwell chips, which arrived this year.”

The report notes that some of this is a timing issue, a gap between getting data centers equipped for use and when customers start paying for services.

Citing internal documents, The Information says that Oracle’s “fast-growing cloud business has had razor-thin gross profit margins in the past year or so,” booking a gross profit of $125 million on rentals of servers that utilize Nvidia chips, for a gross margin of just under 14%.

markets
Luke Kawa

AMD soars again after getting more than 20 price target hikes across Wall Street following its deal with OpenAI

Over the past 24 hours, Wall Street has been scrambling to revise its view on how high shares of Advanced Micro Devices can climb in the wake of its recently announced megadeal with OpenAI.

While the terms of the arrangement may raise some eyebrows, Wall Street is expecting that OpenAI’s big foray into AMD’s AI chips will serve as a validation point and magnet for other potential buyers.

“OpenAI is arguably the most disruptive of GenAI cloud computing customers, and its success is likely to act as a force multiplier for other cloud vendors and LLM providers to accelerate their capex, positive for multiple chip, memory, optical, networking, and foundry suppliers,” wrote Bank of America analyst Vivek Arya, who estimates the agreement could be worth over $100 billion over the next four to six years.

As of publishing, we’ve tallied up 22 cases where the sell side has hiked its price target on the chip designer since news of the deal broke:

  • Jefferies, to $300 from $170 (also upgraded the stock to “buy” and had raised its price target just last week!)

  • Melius, to $300 from $200

  • Barclays, to $300 from $200

  • Wells Fargo, to $275 from $185

  • Argus Research, to $275 from $200

  • Cantor Fitzgerald, to $275 from $200

  • Truist, to $273 from $213

  • Benchmark, to $270 from $210

  • New Street Research, to $265 from $230

  • Bank of America, to $250 from $200

  • Roth Capital, to $250 from $200

  • Morgan Stanley, to $246 from $168

  • Baird, to $240 from $175

  • President Capital Management, to $240 from $186

  • Evercore ISI, to $240 from $188

  • Stifel, to $240 from $190

  • Piper Sandler, to $240 from $190

  • Citi, to $215 from $180

  • Goldman Sachs, to $210 from $150

  • Morningstar, to $210 from $155

  • Bernstein, to $200 from $140

  • Deutsche Bank, to $200 from $150

Bloomberg has average price target data going back to September 2005. Over the past two decades and change, there have been only 12 instances where the two-day average price target rose more than the 16% upward revision since the OpenAI pact was announcement.

  • Jefferies, to $300 from $170 (also upgraded the stock to “buy” and had raised its price target just last week!)

  • Melius, to $300 from $200

  • Barclays, to $300 from $200

  • Wells Fargo, to $275 from $185

  • Argus Research, to $275 from $200

  • Cantor Fitzgerald, to $275 from $200

  • Truist, to $273 from $213

  • Benchmark, to $270 from $210

  • New Street Research, to $265 from $230

  • Bank of America, to $250 from $200

  • Roth Capital, to $250 from $200

  • Morgan Stanley, to $246 from $168

  • Baird, to $240 from $175

  • President Capital Management, to $240 from $186

  • Evercore ISI, to $240 from $188

  • Stifel, to $240 from $190

  • Piper Sandler, to $240 from $190

  • Citi, to $215 from $180

  • Goldman Sachs, to $210 from $150

  • Morningstar, to $210 from $155

  • Bernstein, to $200 from $140

  • Deutsche Bank, to $200 from $150

Bloomberg has average price target data going back to September 2005. Over the past two decades and change, there have been only 12 instances where the two-day average price target rose more than the 16% upward revision since the OpenAI pact was announcement.

markets
Luke Kawa

AppLovin rebounds as Citi says tumble on report of SEC probe is a buying opportunity

AppLovin got thwacked late in the session on Monday following a report by Bloomberg that the SEC is investigating the ad tech company’s data collection practices.

Shares are paring some of that decline on Tuesday, up about 3% in early trading. Citi analyst Jason Bazinet calls yesterday's late tumble “a bit extreme,” as he estimates it’s equivalent to pricing in a $680 million hit to revenues.

“We would be buyers on any weakness,” he wrote.

Bazinet, who has a “buy” rating and $850 price target on AppLovin — the highest among all analysts polled by Bloomberg — suggested the company’s response to the report implies it may not be that serious of an issue, in management’s eyes. AppLovin told Bloomberg that it would disclose material developments through appropriate public channels.

“We view the lack of an 8K filing as a positive in that the firm does not view this probe as a ‘material’ risk,” he wrote. “In addition, we would suspect Apple and Google would properly monitor their respective platforms and enforce any potential violations.”

markets
Matt Phillips

IREN jumps after announcing multiyear cloud services contracts with “leading AI companies”

IREN shares soared in early trading for a second day after the bitcoin miner and AI compute provider issued a press release announcing new multiyear deals with “leading AI clients” to put its Nvidia GPUs to work on their behalf. The release did not provide any additional details on the nature of these customers.

The company said it “remains on track to achieve >$500m in annualized run-rate revenue (ARR) from the 23k GPUs currently operating and on order by the end of Q1 2026.”

Shares in the company have also benefited from a strong run-up in crypto prices recently and an upsurge in chatter about the company on the influential subreddit r/WallStreetBets. Call volumes — a favorite vehicle for risk-hungry retail traders — have surged in recent weeks.

markets
Luke Kawa

AMC rises after announcing that its Taylor Swift viewing parties were “a record-setting, box office smash hit”

AMC is up in premarket trading after the theater company said that its “cinematic experience” for the release of Taylor Swift’s “The Life of a Showgirl” grossed more than $50 million, with $34 million of that in the US.

The company’s press release from after the close on Monday highlighted three records the release party broke in its three-day run:

  • “TAYLOR SWIFT | THE OFFICIAL RELEASE PARTY OF A SHOWGIRL is the biggest grossing album-debut theatrical event of all time at the domestic and global box office.”

  • “It is the only album-debut cinematic experience in history to finish No. 1 at the domestic box office.”

  • “It is the only ‘non-film’ theatrical event this century to finish a weekend No. 1 at the domestic box office.”

Shares of the company had jolted higher when this collaboration was initially unveiled on September 19.

“On behalf of AMC Theatres and the entire theatrical exhibition industry, I extend our sincerest appreciation to the iconic Taylor Swift for bringing her brilliance and magic to movie theatres this weekend,” AMC Chairman and CEO Adam Aron said. “Her vision to add a cinematic element to her incredible album debut was nothing less than a triumph.”

(I’m a card-carrying Swiftie, but I have to say this album was very meh, almost like she’d promised Travis Kelce his own version of “Lover” because Joe Alwyn got one.)

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