bulgie 

Sorry to quibble, but yes it will. Probably what you mean is "it'll still be strong enough" and maybe it will, but I have my doubts. It's not a small hole, relative to the 7/8" diameter of the quill.

Unless you were talking about placing it elsewhere on the stem, like in the extension, not the quill? That might be marginally safer if it's in an over-built part of the stem, but it depends on where and how.

I question why you'd use a riv-nut, which requires a much larger hole, versus just drilling and tapping the stem metal. Not owning a tap maybe? If that's it, I'd say that's false economy, given the very high stakes in the event of a stem snapping off.

The critical crack length, where a fatigue crack stops growing slowly and the rest of the uncracked metal snaps off catastrophically, is small for aluminum. You can't necessarily depend on being able to spot the fatigue crack in time. Most likely, the first notice you'll get is flying off the bike, with the handlebars still in your hands.

Apologies if you're an engineer or top machinist and you've done all the calculations and testing needed to do this safely. I don't know you, so I am assuming no special knowledge on your part, out of an abundance of caution, not as an insult.

Mark B