Rigetti Computing is now one of those shares that makes the investors think that they have just arrived early into the future. Quantum computing does not sound like a tech of today’s world, but is something from a sci-fi movie. However, Rigetti is one of the very few companies listed on stock exchanges that provides a pure-bet option on that future.
The past year has seen a shocking 184% rise in the company stock, which has been driven by the steady technical progress, a $5.8 million research contract with the U.S Air Force, and a partnership with Nvidia that instantly adds up to its credibility. Besides, there is a wider surge of enthusiasm around next-generation computing, so Rigetti has quickly emerged as one of the fieriest names in the quantum space.
Valuation Gets a Reality Check
The excitement surrounding Rigetti has brought along a valuation that sounds a bit crazy. Rigetti’s market capitalization today is around $8.4 billion, and it trades at about 409 times this year’s expected sales, which is a figure that might even scare the most daring growth investors. The thing to wonder about is whether this is a future quantum leader in making, or is it just a stock that got lucky and has become too bullish.
Although the technology story is compelling, the financials are a bit more conservative. On one hand, the technology narrative is very strong and on the other hand, the numbers coming from the business side indicates one to be cautious. This reminds the investors that quantum does not always automatically translate into short-term revenue growth, but it also requires long-term patience.
Strong Vision & Weak Sales Momentum
Sales growth does not really seem promising for Rigetti when it comes to its recent performance. Last year’s third quarter saw revenues fall to around $1.95 million, which is down from roughly $2.38 million. It is the same story if one takes a broader view, as sales for the first three quarters in the last year amounted to $5.22 million compared to $8.52 million for the same period in 2024. For a company working in an advanced, developing market, these figures are not great. In a pioneering market where a company is positioned at the forefront, such figures might not be alarming, but it still would not be in line with the stock’s heated performance. A rift between the two paths suggests that the optimism about the future potential may be responsible for the lifting of the stock price at present.
Hype & Long-Term Potential
Rigetti is still at an early stage of the journey. It is possible that some customers decided to hold off on their orders because they were waiting for systems with higher qubit counts, but quantum computing naturally is not a quick process, and one requires patience for it. However, the stock market trend, as of now, is quite an enthusiastic one when compared to the company’s recent business activities. Investors who have committed their money to Rigetti today are basically betting on what quantum computing could become, and not what the company has already produced. However, it is not something bad, but it does make the investment more risky, specifically at the current high valuations.
Better Ways for Quantum Computing
There might be some more balanced options for the investors who want to get into quantum computing, but not with such a big hype-driven risk attached to it. The D-Wave Quantum’s focus in the pure-play space with its quantum annealing advanced tech could be in a position to offer more realistic near-term commercialization opportunities.
On the contrary, Alphabet provides a diversified way to enjoy the quantum advancements, benefiting from the strong core businesses, which in turn minimizes the downside risk. When compared with these options, Rigetti’s stock is less like a carefully calculated investment and more like a risky and a high-reward bet with a very long payout period.
Bottom Line
Rigetti Computing is undoubtedly making great strides in quantum technology, and its collaborations and research accomplishments imply that it should be included in the discussions about computing’s future. However, the dramatic increase in the stock price seems to be mainly driven by hype rather than the actual financial situation.
It is possible that Rigetti will eventually become a significant player in quantum computing, but the current valuation is very tight for errors. At this moment, the company appears to be more of an intriguing tech story than a fairly valued investment, so it is a stock that needs watching, yet also some extent of skepticism as well.
