Rigetti Computing (RGTI, Financial) shares shot 48% higher on Tuesday after B. Riley reaffirmed the 'Buy' rating and raised the price target to $8.50 from $4.00. It comes on the heels of the company's renewed hopes of commercializing the quantum computing sector.

• Warning! GuruFocus has detected 4 Warning Signs with RGTI.

Those gains illustrate investor confidence in Rigetti's both intermediate and long-term potential, even given recent market volatility driven by comments from Nvidia (NVDA, Financial) CEO Jensen Huang about the 'very useful' prospects for quantum computers. Regarding Rigetti, "the key driver here is that they have overlooked technical things that are really important," said Craig Ellis of B. Riley, an analyst who cited the scalability of quantum systems for high-value workloads that simply aren't accessible by traditional technologies.

Ellis noted that Rigetti's equity capital raises in the fourth quarter of 2024 clearly alleviated prior cash sufficiency concerns, allaying a huge hurdle for the company's growth. Rigetti's investment appeal was also strengthened by his highlighting the company's position as a could-be leader in government-related quantum computing adoption.

The analyst acknowledged technical scale-up hurdles and long delays to profitability and countered that rising interest in so-called frontier technologies beyond artificial intelligence could drive up Rigetti's growth. We also pointed to key factors to watch in the years ahead, which included the maturing of the quantum ecosystem and more commercial engagement.

Rigetti's strong showing comes as broader quantum computing stocks rebound from a period of under pressure over the past few years. This progress could put the company in a strong position to become a key player in the fast-developing quantum world.