Rigetti Computing's stock plummeted by 5.08% on Wednesday, as Wall Street analysts and investors expressed concerns over the unsustainable hype surrounding quantum computing stocks.

The quantum computing company, which develops superconducting quantum processors and related services, had seen its shares surge by over 800% in the past six months, fueled by speculation that its technology could revolutionize industries like artificial intelligence and drug development.

However, a report by Needham analyst Quinn Bolton poured cold water on the rally, setting a price target of $2 for Rigetti Computing, implying a potential 80% decline from its recent highs. Bolton cited several reasons for the cautious outlook:

First, history has shown that next-big-thing investments often experience bubble-bursting events as lofty expectations fail to materialize in the short term. Quantum computing, despite its promising potential, is still in its early stages and faces challenges in scalability and mainstream adoption.

Second, Rigetti Computing and its peers have yet to demonstrate sustainable operating models, with ongoing net losses and significant cash burn. The company lost $48 million in the first nine months of 2024 and saw its cash burn from operations increase year-over-year.

Bolton's bearish stance echoed concerns raised by CNBC's Jim Cramer, who warned investors against getting overexposed to the "froth" in quantum computing stocks, labeling them as "the worst of the excess."