Why Quantum Hopes Might Not Outweigh AI's Present Growth: A Rigetti vs. The Future Analysis

The race to dominate the AI revolution has created stark contrasts between companies betting on tomorrow’s breakthroughs and those capitalizing on today’s opportunities. Rigetti Computing (RGTI), a pioneer in quantum computing, has faced a brutal reckoning in early 2025 as investor patience wanes. Meanwhile, AI stocks like SoundHound AI (SOUN) and Upstart (UPST) are delivering tangible growth. Is it time to abandon Rigetti for these rising stars? The data suggests a cautious “yes”—but with caveats.

Rigetti’s Quantum Dilemma: High Risks, Long Wait Times

Rigetti’s Q1 2025 stock plunge——reflects the harsh reality of quantum computing’s timeline. Despite a $100.5 million cash infusion and modest gross margin improvements, the company’s revenue remains minuscule ($2.55M projected for Q2 2025) while R&D costs balloon to $59.8 million annually. Analysts’ “Strong Buy” ratings hinge on $2.5 billion in federal quantum funding and a 20-year vision of commercialization.

But here’s the problem:
- Cash Burn Crisis: With a negative EBIT margin of -1,852.5%, Rigetti’s path to profitability is murkier than ever. Even its “Strong Buy” consensus assumes a 77.88% upside to $14.80 by late 2025—a stretch given its Q1 48.1% decline.
- Competitive Overhang: Tech giants like Google and Microsoft are pouring billions into AI and quantum research, leaving smaller players like Rigetti at a funding and talent disadvantage.

SoundHound AI: Voice Tech’s Scalable Play

SoundHound (SOUN) offers a stark contrast. Its conversational AI platform, deployed in 30,000+ locations from car dealerships to restaurants, delivered 85% revenue growth in 2024 to $84.7 million. Analysts at H.C. Wainwright see a 232% upside to $26/share, citing its “ecosystem integration” potential.

Yet risks linger:
- Profitability Lag: A $19 million net loss in Q4 2024 and $109 million in annual operating expenses mean more dilution is likely.
- Regulatory Scrutiny: Voice data collection faces growing privacy concerns, particularly in the EU.

Upstart: AI Lending’s Market Leader

Upstart’s (UPST) AI-driven lending platform has quietly transformed underbanked consumer finance. With 3 million customers and partnerships with major lenders, its 2024 revenue likely surpassed $100 million. Its AI underwriting system claims a 40% lower default rate than traditional methods, a compelling edge in a tightening credit market.

But challenges persist:
- Market Saturation: Competitors like Zest AI and LendingClub are adopting similar models, compressing margins.
- Regulatory Risks: Algorithmic bias lawsuits could disrupt its growth.

The Numbers Don’t Lie—Yet

Metric	Rigetti (RGTI)	SoundHound (SOUN)	Upstart (UPST)
12-Month Stock Return	-48.1% (Q1 2025 drop)	+92.6%	+81.5%
Revenue Growth (2024)	-32% (YoY)	+85%	N/A (est. +50%)
Analyst Upside	77.88% (to $14.80)	132% (to $26)	40% (to $15)
Cash Position	$100.5M (vs. $2.25B mkt cap)	$N/A (high burn)	$145M (strong liquidity)

Conclusion: Prioritize Present Growth, Not Quantum Hopes

Investors facing the Rigetti vs. AI stock dilemma must weigh time horizons and risk tolerance.

• Rigetti’s Case: Its 20-year timeline and reliance on government funding make it a speculative bet, best suited for investors with high risk tolerance and a decades-long horizon. Its 77% upside target is optimistic given its Q1 collapse and cash burn.
• SoundHound & Upstart: Both offer scalable, revenue-driven AI models with clear use cases. SoundHound’s 92% 12-month return and Upstart’s 81.5% gains reflect investor confidence in their near-term growth.

The key trade-off is this: Quantum computing’s potential is vast, but its execution timeline is uncertain. Meanwhile, AI-driven voice tech and lending are already generating real revenue. For most investors, the latter two present better risk-adjusted opportunities in 2025.

In a sector where valuations are either sky-high (NVIDIA’s $3T cap) or speculative (QUBT’s 622% run), SoundHound and Upstart strike a middle ground. They’re not immune to risks—cash burn, regulation, competition—but their grounded growth trajectories make them smarter picks than Rigetti’s quantum gamble.

Final Call: Sell Rigetti, buy SoundHound and Upstart—unless you’re willing to wait 20 years for quantum’s payoff.