Key Takeaways
- Rigetti closed at $11 on Monday, just above its 52-week low and about 74% below its 52-week high.
- Q2 revenue rose 185% to $5.1 million, while the operating loss widened to $28.1 million.
- A $100 million CHIPS Act award eases funding risk, but the stock still trades near 118x forward revenue.
- The Q3 report around November 12 should show whether growth holds before the $8.4 million C-DAC order lands in Q4.
Washington’s money came through for Rigetti Computing (RGTI). The stock went the other way.
Shares closed at $11 on Monday, just above the 52-week low. They are down about 74% from the 52-week high of $45 and have lost roughly 14% in the past two weeks alone.
That slide followed real progress. In September, Rigetti signed a definitive $100 million CHIPS Act award with the U.S. Commerce Department.
So the market is now asking a blunter question: how long before revenue catches up to the science?
Washington signs a $100 million check
The award spans three years and targets three bottlenecks: miniaturized readout electronics, more cryogenic capacity and high-connectivity chip fabrication. In return, the Commerce Department takes a minority, non-controlling equity stake.
CEO Subodh Kulkarni said in August that the funding “underscores the strategic importance of our platform.”
The Q2 numbers behind it:
- Revenue of $5.1 million, up 185%, driven by on-premises Novera QPU sales.
- Gross margin of 43%, up from 31%.
- Cash and investments of $541.3 million, with no debt.
Quarterly revenue is finally climbing off a tiny base…
The $8.4 million C-DAC order, slated for Q4 recognition, could make that quarter the biggest yet.
Money buys time, losses keep growing
The award matters because quantum hardware is expensive. Operating loss widened to $28.1 million in Q2 from $19.9 million a year earlier, and R&D alone ran $20.7 million.
GAAP net loss reached $52.6 million, inflated by non-cash fair value changes on warrants and earn-outs.
On the tech side, Rigetti deployed Cepheus-1-108Q, a 108-qubit multi-chip system. It is also building a hybrid supercomputer with Hewlett Packard Enterprise (HPE) and the Pittsburgh Supercomputing Center.
Peers show a similar pattern. D-Wave Quantum (QBTS) posted Q2 revenue of $3.1 million, essentially flat, against an operating loss of $53.3 million.
How fast are losses scaling against that revenue?
Losses are rising faster than sales, so the $541 million cash pile matters more than any single quarter’s revenue.
TIKR tracks 13 analysts on Rigetti Computing. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Rigetti Computing, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Rigetti Computing’s Analyst Ratings
Still pricey after a 74% drop
Rigetti’s market cap is about $3.8 billion. That works out to roughly 118x forward revenue and 257x trailing revenue.
D-Wave trades at about 58x forward revenue, half Rigetti’s multiple, while carrying a slightly larger $4.3 billion market cap.
Analysts expect revenue to compound near 149% a year over the next two years. The average Street target of $29 implies about 150% upside, which says more about how wide quantum forecasts run than about certainty.
Insiders have been sellers, too. Kulkarni sold 120,000 shares in September for $1.88 million, and the Commerce equity stake, sized to match the funding, adds dilution.
Set side by side with its quantum peers, the premium stands out.
Rigetti’s premium over D-Wave has held even through the selloff.
My take: The CHIPS award lowers funding risk and validates the chiplet approach. Still, 118x forward revenue prices in commercial traction that has yet to show up. I’d want to see the C-DAC revenue land and gross margin hold above 40% before calling this selloff an opportunity.
Rigetti reports Q3 results around November 12. Revenue against the roughly $5 million Q2 level, plus any word on new system orders, will show whether Q2 was a step up or a one-off.
So what is Rigetti Computing stock actually worth?
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