Reddit Driven Hype Leads to Rigetti Computing’s 555% Stock Surge, But Volatility Looms

Reddit has emerged as a powerful force in the stock market, generating hype and sparking massive discussions that can send stocks soaring or crashing. The latest company to experience this phenomenon is Rigetti Computing, a rising star in the quantum computing sector.

As reported by Altindex.com, the momentum from Reddit’s massive user base powered Rigetti Computing’s stock to a staggering 555% increase in just one month. However, as the hype started to fade, the stock experienced a sharp 55% drop in the final week, underscoring the high volatility of stocks driven by social media buzz.

This sharp rise and fall of Rigetti’s stock highlights the unpredictable nature of Reddit-driven trading, where market sentiment can change rapidly, making it a risky space for investors.

The alternative data platform AltIndex monitors unconventional data sources like social media sentiment, Reddit mentions, Google trends, customer reviews, job postings, and more, helping investors stay ahead of market trends and make smarter stock picks.

At the beginning of December, the platform noticed a significant spike in Reddit mentions for Rigetti Computing and its stock RGTI. With quantum computing stocks gaining traction on investing subreddits, Rigetti quickly became one of the most discussed stocks.

The bullish sentiment among Reddit investors was followed by a sharp rise in the stock price, soaring by over 200% within a matter of days. With the Reddit crowd hyping up the potential of quantum computing, RGTI stock climbed an incredible 555% by the end of the month.

Although RGTI Reddit mentions remained steady in the following days, the social media sentiment started to wane, followed by a 55% price drop in a single week. This huge drop highlights the influence of Reddit-driven trading, which likely contributed to this pump-and-dump” effect.

In recent years, many stocks have seen their prices skyrocket or plummet, fueled by Reddit buzz. In 2024, this phenomenon reached new heights, with Reddit investors striking gold. According to AltIndex analysis, eight out of ten top-discussed Reddit stocks, including GameStop, Nvidia, Tesla, Google, Apple, Robinhood, Amazon, and Meta, hit an average year-over-year return of 59%, doubling the S&P 500’s growth.

Still, Rigetti Computing’s rollercoaster month is a good example that investing only on Reddit-driven trends without the real-time insights can be risky. By using alternative data and analyzing trends in real-time, investors can better recognize potential opportunities and risks, before they show in the market.