Rigetti Computing: Is the Quantum Dip a Buying Opportunity?

Marcus LeeWednesday, Jun 18, 2025 12:41 pm ET
11min read

The stock of

(RGTI) has been a rollercoaster ride for investors in 2025, plunging nearly 30% year-to-date as of June. Yet beneath the volatility, the company is quietly advancing its position as a leader in quantum computing infrastructure. For investors weighing whether to dip into this high-risk, high-reward sector, the question is clear: Does Rigetti's near-term challenges overshadow its long-term potential, or is the current dip a buying opportunity?

Near-Term Catalysts: Government Contracts and Technical Breakthroughs

Rigetti's recent quarters have been marked by a mix of financial struggles and strategic wins. While revenue fell to $1.5 million in Q1 2025—well below consensus estimates—the company's non-cash net income of $42.6 million highlights its liquidity strength, bolstered by a $35 million infusion from Quanta Computer in April. More importantly, government-funded projects are providing critical validation:

  1. DARPA's Quantum Benchmarking Initiative: Rigetti has advanced to Stage A of a $1 million project to develop a Utility-Scale Quantum Computer (USQC). This partnership with Riverlane focuses on scalable quantum error correction (QEC), a linchpin for practical quantum applications.
  2. AFOSR Grant: A $5.48 million award will refine its Alternating-Bias Assisted Annealing (ABAA) chip fabrication process, aiming to reduce qubit defects and improve scalability—a technical milestone that could differentiate Rigetti's hardware.

Long-Term Potential: The Quantum Computing Market's Ground Floor

The quantum computing sector remains in its infancy, but the stakes are massive. McKinsey estimates the global quantum computing market could reach $850 billion by 2040, with industries from pharmaceuticals to logistics racing to harness its potential. Rigetti's strengths lie in its modular architecture (allowing qubit count scaling without reengineering systems) and partnerships with institutions like Oak Ridge National Laboratory and Riverlane. Recent technical advances, such as optical control of superconducting qubits (reducing thermal load) and its quantum preconditioning algorithm (improving grid optimization accuracy), underscore its R&D prowess.

Yet, the path to profitability is fraught with hurdles. Analysts question whether Rigetti can monetize its innovations quickly enough. Its Q2 2025 revenue estimate of just $3 million highlights the gap between R&D and revenue generation—a challenge shared by industry peers like IonQ and D-Wave.

Risks and Realities: Valuation, Competition, and Skepticism

  • Valuation Concerns: At a price-to-sales ratio of over 218x, Rigetti's stock is a bet on future growth, not present earnings. Such valuations are perilous if the market shifts its focus to near-term losses rather than long-term potential.
  • Skepticism from Tech Giants: NVIDIA's Jensen Huang recently downplayed quantum computing's commercial viability within 15 years—a sentiment that could pressure stocks like RGTI if it gains traction.
  • Execution Risks: Even with government backing, Rigetti must translate technical milestones into revenue. A misstep in its DARPA project or QEC development could spook investors.

Investment Thesis: A High-Risk, High-Conviction Play

For investors willing to accept volatility, Rigetti's dip presents an intriguing entry point—if they can stomach the risks:

  1. Catalysts to Watch:
  2. Q2 Earnings (August 2025): A beat on revenue or margin improvements could stabilize the stock.
  3. USQC Milestones: Delivering on DARPA's Stage A goals by late 2025 would validate its technical leadership.
  4. Partnership Announcements: New collaborations with enterprises or governments could drive narrative shifts.

  5. Risk Management:

  6. Position Size: Given the stock's swings, limit exposure to a small portion of a portfolio (e.g., 2–5%).
  7. Stop-Loss: Consider trailing stops to lock in gains if the stock rebounds.

  8. The Bull Case: If quantum computing hits an inflection point—say, a breakthrough in QEC enabling error-free qubits—Rigetti's early-mover advantage in modular hardware could pay off handsomely. Its $237 million cash balance provides runway to 2026, buying time to execute.

The Verdict

Rigetti Computing is a classic “swing for the fences” investment. The stock's current dip reflects both macroeconomic jitters and skepticism about its path to profitability. However, its government-backed projects, technical innovations, and partnerships position it as a key player in a transformative sector. For long-term, risk-tolerant investors, the 30% decline since late 2024 creates an entry point—if they can hold through the inevitable volatility. For others, it's a gamble best avoided until clearer revenue signals emerge.

Final Takeaway: The quantum dip isn't for the faint-hearted, but for those with a 5–10 year horizon, Rigetti's role in defining the future of quantum infrastructure makes it worth monitoring. Proceed with caution—and a clear exit strategy.