Rigetti Computing: Is the Dip a Trap or a Bargain? Decoding Israel Englander’s Quantum Move

The quantum computing sector is a land of moonshots—where investors gamble on breakthroughs that could reshape industries. Rigetti Computing (RGTI), once a darling of this speculative frontier, now faces skepticism as its stock wobbles amid declining revenue and a valuation that defies logic. Is this a rare buying opportunity, or a trap for the unwary? Let’s dissect the numbers with a contrarian lens.

The Revenue Conundrum: Growth or Stagnation?

Rigetti’s Q1 2025 revenue clocked in at a mere $1.5 million, a figure so small it could be overshadowed by a single venture capital check. While the trailing twelve-month (TTM) revenue as of September 2024 was $11.9 million, there’s no evidence of meaningful growth. Even this paltry revenue base is dwarfed by the company’s $237.7 million in cash reserves, which—while reassuring—doesn’t mask the core issue: Rigetti isn’t generating sales at a pace that justifies its valuation.

The 197x Sales Multiple: A Quantum Leap into Fantasy?

Rigetti’s valuation is the stuff of Wall Street satire. At a Price-to-Sales (PS) ratio of 197x, it’s 130x times higher than the hardware industry median of 1.52. To put this in perspective: A PS ratio this high would require revenue to grow 30,000% within five years to justify the price tag. Even if quantum computing achieves its wildest breakthroughs, scaling to such heights is laughably unrealistic.

The disconnect is stark: $2.7 billion in market cap (estimated) versus $11.9 million in TTM revenue. This isn’t a bet on innovation—it’s a leap of faith into the unknown.

Israel Englander’s Exit: A Signal or an Anomaly?

When Israel Englander, co-founder of Millennium Management and a vocal Rigetti backer, exited his stake, it sent ripples through the investment community. While the company claims the move was “unrelated to fundamentals,” the optics are damning. Big-money players don’t walk away from “bargains”—they flee when the story unravels.

Bullish Analysts vs. Bearish Reality

Analysts cling to the long game: quantum supremacy, pharmaceutical breakthroughs, and encryption-breaking potential. But here’s the rub: the timeline for these “killer apps” is decades away, not quarters. Meanwhile, Rigetti’s Q1 net income of $42.6 million was a mirage—driven by $62.1 million in non-cash gains from derivative liabilities, not operational success.

The Contrarian Verdict: FOMO or Fear?

The allure of Rigetti is clear: it’s the closest thing to a quantum computing “pure play” on the market. But here’s why caution—not FOMO—should rule:
1. Revenue stagnation: With quantum adoption in its infancy, scaling sales is a moonshot.
2. Valuation overkill: A 197x PS ratio demands near-impossible growth.
3. Non-operational profits: Net income is a fiction of accounting, not real cash flow.

Final Word: Proceed with Eyes Wide Open

Rigetti’s dip may feel like a bargain, but it’s a trap for those ignoring the fundamentals. The stock’s valuation is a house of cards—built on speculative timelines and paper gains. Unless you’re prepared to wait decades for the quantum revolution to materialize, this is a risk best avoided.

Investors should heed the lesson of history: overvalued hype rarely ends well. Rigetti’s story is a reminder that even the most promising technologies need proof, not just potential, to justify their price tags.

Stay skeptical. Stay contrarian.