Rigetti Computing: Is the Speculative Nature of Quantum Computing Investments Justified?

Rigetti Computing has achieved 99.5% gate fidelity with its 36-qubit multichip quantum computer, validating its chiplet scaling approach. The company has a strong balance sheet with $571.6 million in cash, providing a runway through 2026 despite minimal revenues. However, the stock's extreme valuation at 495 times sales highlights the speculative nature of quantum computing investments.

Rigetti Computing has made significant strides in the quantum computing sector with the unveiling of its 36-qubit multichip quantum computer, Cepheus-1-36Q, in the second quarter of 2025. The company achieved a median two-qubit gate fidelity of 99.5%, marking a substantial improvement over its prior system, Ankaa-3. This technological milestone underscores Rigetti's commitment to its chiplet scaling approach, which leverages mature semiconductor-style scaling techniques [1].

The financial health of Rigetti is bolstered by a strong balance sheet, with over $570 million in cash and no debt, providing a runway through 2026 despite minimal revenues [1]. This robust financial position allows the company to continue investing in its technology and expanding its capabilities.

However, the stock's valuation is a cause for concern. Rigetti's shares are trading at an extreme valuation of 495 times sales, reflecting the speculative nature of quantum computing investments. While the company's technological progress and strong balance sheet are promising, the high valuation indicates that investors are paying a premium for exposure to this emerging sector [1].

In contrast, IonQ, another pure-play name in the quantum computing space, has been focusing on its trapped-ion platform, emphasizing long coherence times and high-fidelity operations. IonQ's Forte Enterprise and Tempo systems are designed for commercial-grade performance, with an accelerated roadmap targeting higher algorithmic performance. The company has also demonstrated strong commercial traction, with a diversified revenue base and multiyear government contracts [1].

The contrasting strategies and progress of Rigetti and IonQ present investors with a complex decision. Rigetti's high-upside, technology-driven bet is still reliant on execution and policy tailwinds, while IonQ offers a more commercially advanced story with a diversified revenue base. Rigetti's stock has gained 8.6% year-to-date compared to IonQ's 3.6% growth, reflecting the differing investor perceptions of these companies' prospects [1].

References:

[1] https://finance.yahoo.com/news/rigetti-vs-ionq-quantum-computing-162600484.html
[2] https://www.nasdaq.com/articles/rigetti-vs-ionq-which-quantum-computing-stock-smarter-buy