Rigetti

Quantum computing pure-play stocks have been on an unbelievable run over the past few weeks. One year ago, Rigetti Computing (RGTI -3.01%) was essentially a penny stock, trading for less than $1 per share. Now, it’s worth nearly $50 per share. A huge chunk of that growth has come recently, as Rigetti Computing traded for about $15 at the start of September.

There have been numerous headlines that have driven Rigetti Computing’s stock higher over the past few weeks, and after these unbelievable returns, some may be wondering if it’s time to take some profits and move on. However, should Rigetti Computing continue going higher, investors will miss out on some lucrative returns.

So, which course of action is the best?

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Rigetti Computing has soared on a few pieces of news recently

Rigetti Computing is a quantum computing pure play and has no backup business. For Rigetti, it’s quantum computing supremacy or bust. This is no easy feat, as the quantum computing space is filled with other strong competition like Alphabet and International Business Machines (IBM). Both have nearly unlimited resources compared to Rigetti, which makes this uphill climb even more challenging.

However, there are signs that Rigetti will be just fine. Just recently, it announced that it has sold quantum computing systems to two customers for about $5.7 million. One was to an Asian manufacturing company, while the other was a California physics and AI start-up. This shows Rigetti Computing already has a competitive offering for clients, as these two likely shopped around for other options before settling on Rigetti’s Novera quantum computer.

Another headline that caused Rigetti’s stock to pop was JPMorgan‘s announcement that it was investing up to $10 billion in four areas, one of which is quantum computing. This caused shares across the sector to pop, which has me worried that the quantum computing sector may be getting too hot.

In addition to quantum computing, JPMorgan was also planning on investing in supply chains and advanced manufacturing, defense and aerospace, and energy. There are a lot of mouths to feed in those investment sectors, and it’s not like JPMorgan is going to dump all $10 billion into quantum computing stocks. Furthermore, there was no specific announcement that JPMorgan would invest in Rigetti Computing; it was just that it was interested in investing in the sector.

After the pop, Rigetti is a $15 billion company, so even if it received a $1 billion investment from JPMorgan (which is extremely unlikely for JPMorgan to spend 10% of its funds on one company), it would only amount to a small stake in the business.

I think this displays how overheated the quantum computing investment market is getting, as we’re still a ways away from quantum computing being adopted at a widespread scale.

Rigetti Computing thinks we’re still years away from a large quantum computing market

Most quantum computing competitors point toward 2030 as the year when quantum computing will start to become a viable technology. Before 2030, Rigetti estimates that the annual value for quantum computing providers is about $1 billion to $2 billion, mostly fueled by government labs and other research institutions. From 2030 to 2040, the market heats up quite a bit, with Rigetti Computing estimating $15 billion to $30 billion.

If we estimate that the market will reach $30 billion in annual value by 2035, Rigetti captures a 90% market share (similar to what Nvidia has done in the AI world), and it can deliver a 50% profit margin (what Nvidia has accomplished), that would give Rigetti $6.75 billion in annual profits. If we apply a 40 times earnings multiple on that, it would indicate Rigetti would be valued as a $270 billion company. That’s more than a 10-bagger from today’s levels, so if Rigetti wins the quantum computing arms race and takes significant market share, there is still plenty of upside left in the stock.

However, there’s likely to be a large market drawdown sometime between now and 2035, and I’ll likely stay patient with investing in quantum computing stocks until then. I wouldn’t be surprised to see this upward trend continue for the stocks, but that means a bubble could be forming. I don’t think it’s a bad idea to trim some of your quantum computing stocks to take a quick win, as it is a good combination of letting your winners run while also being prudent about the rapid rise of these stocks that are still years away from profitability and viability.

With shares up by a jaw-dropping 5,100% over the last 12 months, Rigetti Computing (RGTI -3.01%) exemplifies the life-changing potential of stock investing. If you bought $10,000 worth of shares of this speculative tech company last October, your position would now be worth over half a million dollars.

After a rise of that magnitude, potential new investors must be left wondering if they should jump on Rigetti’s hype train or wait for a dip. Let’s dig into the company’s fundamentals to decide what the near future might bring.

Is quantum computing ready for prime time?

Quantum computing promises to radically expand the reach of digital technology. When it works accurately, it can solve certain types of unusual, but extraordinarily difficult, problems that would take even a classical supercomputer an impossible amount of time. And while the technology has seemed “just around the corner” for decades, some recent breakthroughs have ignited optimism.

For example, one of the chief challenges in developing a useful quantum computer is that they are vastly more prone to errors than classical machines. But late last year, Alphabet subsidiary Google revealed its Willow chip, a state-of-the-art quantum computing chip that does a progressively better job of correcting its own mistakes the more computing power it uses. Perhaps more remarkably, on one of the benchmark computational problems that is used to test the abilities of quantum machines, Willow delivered the answer in about five minutes. For a traditional supercomputer to solve it would have taken 10 septillion years.

If they can be made reliable and cost effective enough to commercialize, such machines could drive revolutionary advances in areas ranging from drug discovery to material science. Quantum computers could also play a role in artificial intelligence by assisting with model training and optimization, which involves finding the most efficient use of resources to achieve a task.

Where does Rigetti fit in?

While Google looks like the leader in quantum computing technology, a rising tide lifts all boats, and investors are pouring capital into the entire industry. Rigetti’s compelling business model has also likely played a role in its explosive rally.

Rigetti takes a comprehensive picks-and-shovels approach to the quantum computing industry. It designs and builds its own chips, called quantum processing units (QPUs), at its California-based foundry. And it created its own programming language called Quil alongside a platform called Quantum Cloud Services (QCS), which is designed to allow clients to access its quantum processing power through the cloud.

The company is in the early stages of commercialization: It recently announced a $5.7 million purchase order for two of its Novera quantum computing systems, which it expects to deliver in 2026. But while these deals are a good sign, investors shouldn’t expect those purchases to necessarily mark the start of mass quantum computing adoption or sustainable growth.

While nonprofit research institutions and early adopters will continue to experiment with quantum computing, analysts at McKinsey and Company believe scalable quantum devices might not be commercially viable before 2040 at the earliest. In the meantime, Rigetti’s financial condition is alarming.

Massive cash burn

Image source: Getty Images.

For better or worse, public companies exist to generate profits for their shareholders. Technological prowess comes second, and arguably doesn’t matter at all if it doesn’t eventually benefit the bottom line. Rigetti’s shareholders may soon have to reckon with this fact.

In the second quarter, its operating losses grew 24% year over year to $19.8 million (compared to revenue of $1.8 million). Meanwhile, the number of shares outstanding jumped by 74% to almost 300 million. Rigetti is still sitting on a mountain of cash from a $350 million stock offering in June. But that money won’t last forever, and investors should expect the company to continue relying on equity financing to fund operations until it can achieve profitability.

With viable quantum computers potentially over a decade away, Rigetti’s management team will likely need to substantially dilute the positions of current shareholders in their efforts to get the company across the finish line. Yet even with this in mind, it’s not too late to buy the stock. If anything, it’s too early. But it may make sense to wait for a correction or another technological breakthrough before you consider opening a position in the stock.

For the better part of the last three years, seemingly nothing has sparked investor interest quite like the evolution of artificial intelligence (AI). Empowering software and systems with the tools to make split-second decisions without human intervention, as well as to become more proficient at their tasks over time, is viewed as a game-changing technology for most industries around the globe.

Over the last three decades, there’s pretty much always been a next-big-thing trend or technology to captivate the attention and capital of Wall Street and investors. Prior to AI, there was the advent of the internet, genome decoding, nanotechnology, 3D printing, blockchain technology, and the metaverse, to a name a few key trends.

But in rare instances of outsize optimism on Wall Street, two or more game-changing trends can coexist, as we’re witnessing now with the dual rise of AI and quantum computing.

Image source: Getty Images.

The four biggest pure-play quantum computing stocks — IonQ (IONQ 0.46%), Rigetti Computing (RGTI 5.30%), D-Wave Quantum (QBTS 2.00%), and Quantum Computing (QUBT -0.81%) — have rallied between 700% to 5,130%, respectively, over the trailing year (as of Oct. 3). Though optimism is readily apparent, there’s no denying that the time to be fearful when others are greedy has arrived for these four stocks.

What is quantum computing, and why are investors so excited about it?

Quantum computing relies on quantum mechanics to solve complex problems that traditional computers can’t do. What makes quantum computing so exciting is its many real-world possibilities.

For example, quantum computers can be used to run simulations to determine how molecules would behave. These interactions can be quantified to narrow best courses of actions when developing drugs and targeting hard-to-treat diseases. Think of it as genome decoding that’s been ramped up to improve the likelihood of success when developing novel therapies.

Quantum computers can also be deployed to vastly improve cybersecurity solutions. This technology can potentially break existing encryption methods and lead to the development of quantum-resistant solutions that create lock-tight protections for cloud-based systems and end users.

But perhaps the most exciting aspect of quantum computing is what it might be able to do for the AI revolution. Quantum computers can speed up the process by which AI algorithms help software and systems “learn” and become more proficient at their tasks. Training large language models could occur significantly faster with quantum-capable solutions.

Based on one of Wall Street’s lofty estimates, which comes courtesy of Boston Consulting Group, quantum computing can create between $450 billion and $850 billion in global economic value 15 years from now. This high-ceiling estimate corresponds with substantial forward-year sales growth forecasts for the aforementioned pure-play quantum computing stocks:

• IonQ: projected sales growth of 87% in 2026
• Rigetti Computing: projected sales growth of 161% in 2026
• D-Wave Quantum: projected sales growth of 56% in 2026
• Quantum Computing: projected sales growth of 412% in 2026

Though optimism is through the roof, billionaire Warren Buffett’s famous investing advice rings loud: “Be greedy when others are fearful, and be fearful when others are greedy.”

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The time to be fearful with quantum computing stocks is here

Berkshire Hathaway‘s billionaire boss Warren Buffett has absolutely crushed the benchmark S&P 500 over six decades by sticking to this ethos. He pounces when fear creates advantageous price dislocations and sits on his proverbial hands (or sells shares of existing holdings) when valuations no longer make sense. This latter scenario encompasses the need to be fearful when others are being greedy.

There’s no denying that, on paper, quantum computing offers a compelling long-term growth story. The possibility of improving drug development, cybersecurity, supply chains, financial modeling, and AI algorithms, among other use cases, offers intrigue.

But there’s also a long list of reasons why, if you own shares of IonQ, Rigetti Computing, D-Wave Quantum, and/or Quantum Computing, cashing in some or all of your chips right now makes complete sense.

To begin with, history hasn’t exactly been kind to game-changing technologies in their early expansion phase. Looking back more than 30 years, there hasn’t been a next-big-thing trend that’s avoided an eventual bubble-bursting event. Put in another context, investors and businesses have repeatedly overestimated the early stage adoption rate and/or utility of these newer technologies, leading to eventual disappointment.

While I’ve made this same argument with AI, it rings 100 times truer when it comes to quantum computing. Whereas AI hardware is flying off the proverbial shelf, and Wall Street’s most-influential businesses are eagerly deploying AI solutions, quantum computing utility is still very minimal. All the hallmarks of a bubble are firmly in place.

Secondly, these four pure-play stocks are all losing money hand over fist on an operating basis and aren’t particularly close to demonstrating their operating models are viable. Through the first-half of 2025, IonQ’s operating loss more than doubled to $236.3 million from the prior-year period, while Rigetti Computing’s operating loss jumped 27%.

IONQ PS Ratio data by YCharts.

To expand on this point, all four pure-play stocks are valued at price-to-sales (P/S) ratios that absolutely scream “bubble!” Companies on the leading edge of prior next-big-thing trends peaked at P/S ratios ranging from 30 to 40, with a little wiggle room in each direction. The trailing-12-month P/S ratios of Wall Street’s four quantum computing superstars are:

• IonQ: 319
• Rigetti Computing: 1,282.2
• D-Wave Quantum: 375.6
• Quantum Computing: 11,612.3

In no universe do the multibillion-dollar valuations currently assigned to these four stocks justify the relative pittance in continuous sales they’re generating. It’s another sign of a seemingly imminent bubble-bursting event.

The final reason investors should be fearful with these pure-play quantum computing stocks is because the “Magnificent Seven” have deeper pockets and an inside edge to the infrastructure that can fuel an eventual quantum computing revolution. Although companies like IonQ have landed meaningful partnerships, Mag-7 companies have the ability to aggressively spend on quantum computing solutions that may eventually lessen the need for hardware and software solutions from companies like IonQ, Rigetti, D-Wave, and Quantum Computing.

Shares of Rigetti Computing (RGTI 18.29%) skyrocketed 83.6% in September, according to data from S&P Global Market Intelligence. Quantum computing stocks generally surged last month, with gains ranging from Quantum Computing‘s 17% jump to D-Wave Quantum‘s 58% spurt, but they couldn’t keep up with Rigetti.

Image source: Getty Images.

Government contracts and quantum orders fueled Rigetti’s recent rise

The stocks mentioned above often move as a group. When one quantum computing expert announces a technology breakthrough, all of them bask in that glory for a while.

September saw some of that effect play out. For example, Rigetti’s stock jumped 14% on Sept. 11, driven by IonQ restructuring its business to meet higher demand from the federal sector.

But Rigetti cooked up most of its own market-moving fuel last month. The flashpoint for a 48% price surge in the third week of September was a three-year contract from the U.S. Air Force Research Laboratory.

Rigetti and Air Force researchers will explore superconducting quantum networking together. This technology seeks to transfer the quantum state of qubit computing units over long distances, resulting in faster and more accurate data transfer.

At the very end of September, Rigetti also posted two purchase orders for its top-of-the-line Novera systems, sparking a single-day stock jump of 16.5%. The upgradable systems should be delivered in the first half of 2026.

The customers in this two-part deal are not arms of the American government. One is an as-yet-unidentified technology manufacturer headquartered in Asia. The other is a California-based start-up in the field of artificial intelligence and applied physics. Both will focus their Rigetti systems on noncommercial tasks such as internal training and hands-on error correction research.

Is Rigetti’s quantum leap worth the risk?

Rigetti’s blossoming sales and contracts are exciting, and the quantum computing industry as a whole is making big strides toward long-term commercial success at the moment. However, the financially sustainable future of the technology is still many years away. And it’s a risky ride.

The two Novera orders boosted Rigetti’s market cap from $9.66 billion to $11.22 billion. That’s a $1.56 billion boost from two sales worth (checks notes) a total of $5.7 million. That’s a lot of investor optimism based on a pair of fairly small contracts.

And that’s not a rare example. Stocks like Rigetti (and IonQ, and D-Wave, and…) often make big moves on tiny bits of news. Investors are looking for the next big thing, hoping to capture huge long-term returns before everyone else gets in on the same secret.

But Rigetti isn’t a secret anymore, and the company still faces huge risks on the road to profitable quantum computing operations. I’m watching this space with trillion-dollar tech titans in my quantum portfolio — not risky early-stage challengers with small revenue streams and huge bottom-line losses.

Shares of Rigetti Computing (RGTI 15.44%) are rising on Friday, up 15.4% as of 2:59 p.m. ET. The jump comes as the S&P 500 and the Nasdaq Composite gained 0.3% and 0.4%, respectively.

The quantum computing stock continues to ride momentum from a federal contract win announced yesterday.

Rigetti secures $5.8 million Air Force deal

The company announced that it has secured a $5.8 million, three-year contract from the Air Force Research Laboratory, focusing on quantum networking technology.

Under the contract, Rigetti plans to work with Netherlands-based start-up QphoX to explore methods for combining their technologies. The goal is to enable information transfer between quantum computers.

While the announcement excited investors, CEO Subodh Kulkarni made clear this is an experimental program, describing it as “a far-out kind of research program” that’s “very much in the R&D phase.”

Image source: Getty Images.

The quantum networking opportunity remains distant

The potential of quantum is enormous, but the technology is earlier in its development than investors believe it to be. Rigetti and its peers are heavily overvalued. The company’s price-to-sales is an astronomical 779. Despite sales last year of just $10.8 million — which was less than 2023’s sales — the company’s market cap is over $9 billion.

There are more risks here than upside with a valuation like that. The quantum computing market is full of a lot of hype and enthusiasm that I think is leading investors astray. I would stay away from Rigetti stock and others like it. Instead, investors should look at stocks like Alphabet.

Rigetti Computing (RGTI -2.14%) is among the stocks benefiting from investor interest in the quantum computing field. The company’s shares are up over 1,500% in the past 12 months through Aug. 27.

Rigetti and other businesses in the sector are developing technology with the potential to transform industries, including medicine and artificial intelligence. Because quantum computers are powered by atomic particles, they boast computational capabilities beyond the reach of current classical computers.

However, they also have shortcomings that hinder their widespread adoption. One key drawback is that errors creep into quantum computations due to the extreme difficulty of isolating and controlling quantum states. While quantum computing is inherently probabilistic (which is actually useful for many algorithms that rely on randomness), the real challenge is that environmental noise and imperfect controls corrupt these probabilities. Finding and correcting these errors — distinguishing between intended quantum randomness and unwanted noise — is one of the field’s key issues.

Can Rigetti’s tech overcome such challenges? Discovering the answer requires diving into the company in more detail.

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Rigetti’s technological prowess

Rigetti’s technology employs superconducting qubits, a widely used approach to quantum computing due to its advantages. This method performs faster than other quantum techniques and leverages existing semiconductor chip fabrication processes, which helps to scale up the technology.

In recent weeks, Rigetti unveiled its latest invention, the Cepheus-1-36Q. This multi-chip quantum machine is the largest in the industry, according to the company. Moreover, the device’s calculation error rate is half that of its predecessor.

The Cepheus-1-36Q shows Rigetti is making progress toward overcoming the issues inherent in quantum computers. Despite that, the company isn’t growing sales this year. In the second quarter, Rigetti generated $1.8 million in revenue, which was down from $3.1 million in 2024.

A look into Rigetti’s financials

While the company has struggled to produce revenue, its costs are climbing. Rigetti’s Q2 cost of revenue and operating expenses both ticked up from 2024, resulting in an operating loss of $19.9 million versus a loss of $16.1 million in the previous year.

The costly combination of rising expenses and declining sales is cause for concern. Rigetti’s saving grace is that it amassed an impressive $571.6 million in cash, cash equivalents, and available-for-sale investments with no debt on its balance sheet. The funds can sustain operations in the short term as the company builds up income.

The quest to increase sales relies on how quickly Rigetti’s tech can achieve quantum advantage. This is the point at which a quantum device can solve useful, real-world problems more effectively than classical computers.

According to CEO Dr. Subodh Kulkarni, Rigetti is about four years away from achieving quantum advantage. In the meantime, it’s cobbling revenue together from organizations interested in quantum computing for research and experimentation, such as its collaboration with Montana State University announced on Aug. 20.

Factors to consider before deciding on Rigetti stock

At this early stage in quantum computing’s development, Rigetti’s future depends on reaching quantum advantage as fast as possible. Once there, it can unlock more sales as its technology becomes a superior alternative to classical supercomputers.

Can Rigetti achieve this goal in four years? Its shares are trading as if that’s likely.

Here’s a look at the stock’s valuation using the price-to-sales (P/S) ratio, and contrasting it to other pure-play quantum computing competitors IonQ and D-Wave Quantum. This metric measures how much investors are willing to pay for every dollar of revenue generated over the trailing 12 months.

Data by YCharts.

Rigetti’s P/S multiple is sky-high compared to its rivals, indicating that shares are expensive. Perhaps investors are betting the company can achieve quantum advantage.

But a lot can happen in four years, and if Rigetti continues to burn through cash with little revenue trickling in, the business may not survive to achieve its goal.

In addition, many well-heeled competitors, including Alphabet-owned Google, are actively pursuing quantum advantage. Google has already developed a quantum chip capable of completing a complex computation in five minutes that would take centuries with today’s fastest supercomputers. Granted, this algorithm is a benchmark designed to be easy for quantum computers and hard for digital system, but it’s still an impressive achievement.

Although it’s too early to tell which business will deliver the dominant technology, one or more of these rivals could build a scalable quantum computer that overcomes the obstacles to broad adoption. This competition impacts Rigetti’s ability to attract customers, as evidenced by its difficulties with revenue growth.

Consequently, only investors with a high risk tolerance should consider buying Rigetti shares. Even then, given its stock’s inflated valuation, the ideal approach is to wait for the share price to drop before deciding to invest.

Rigetti Computing (RGTI +0.08%) stock is soaring higher in Thursday’s daily trading session. The quantum computing specialist’s share price was up 9.6% as of 3:15 p.m. ET. Meanwhile, the S&P 500 had risen 0.3%, and the Nasdaq Composite was up 0.6%. The quantum stock had been up as much as 12.2% earlier today.

Rigetti’s valuation is surging thanks to recent comments from Jim Cramer, the host of CNBC’s Mad Money television show. With today’s pop, the stock is now up roughly 19% over the last three months despite some big volatility across the stretch.

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Rigetti stock soars as Cramer shifts his stance

In yesterday’s episode of Mad Money, host Jim Cramer had some encouraging things to say about Rigetti:

Rigetti could have something that could be a home run. RGTI is one that could have a headline tomorrow. I don’t want to keep you out of it.

The host’s comments look particularly notable given that he had indicated earlier this year that Rigetti could be the worst play among the basket of high-flying quantum computing stocks.

What’s next for Rigetti?

With the second-quarter report it published earlier this month, Rigetti announced that its Cepheus-1-36Q had become commercially available. The company says that its 36-qubit multichip quantum computer is offering industry-leading performance, and it will pave the way for the launch of the Rigetti Quantum Cloud Services Platform on Microsoft‘s Azure cloud infrastructure service in the near future.

Rigetti also said that it’s on track to launch its 100+ qubit system by the end of the year. While the stock remains a high-risk, speculative play, the quantum computing player appears to be making meaningful progress with its tech platform.