Rigetti Computing (RGTI) shares rose 3.4% to $26.41 by late Monday morning, recovering from early weakness as investors reacted to new quantum computing research and last week's U.S. funding announcement. More than 35 million shares changed hands before noon in New York, with the stock trading between $24.12 and $26.47.
The company's market capitalization has swelled to nearly $8.8 billion, a figure that stands in stark contrast to its Q1 revenue of just $4.4 million and an operating loss of $26 million. This valuation reflects the market's focus on future potential rather than current financial performance, making Rigetti particularly sensitive to technical updates, government funding news, and moves by competitors.
Quantum Error Correction Milestone
A paper published Monday in Nature Communications, co-authored by researchers from Riverlane and Rigetti, demonstrated real-time, low-latency quantum error correction on superconducting qubits. The team successfully ran an 8-qubit test with up to 25 rounds of decoding, maintaining a mean decoding time per round under one microsecond.
Error correction remains one of the most significant hurdles in quantum computing, as it is essential for moving from current noisy intermediate-scale quantum (NISQ) devices to fault-tolerant systems capable of practical, large-scale computations. While this research is not a customer contract, it provides proof-of-concept that the field is making progress.
CHIPS Act Funding and Government Support
Rigetti's share price continues to benefit from the May 21 announcement that the company signed a letter of intent with the U.S. Commerce Department for up to $100 million in CHIPS Act funding over three years. The government will take an equity stake tied to the funding, which CEO Subodh Kulkarni said could help the company address "key scaling bottlenecks."
The company ended March with $569 million in cash, cash equivalents, and available-for-sale investments. Rigetti also announced that its 108-qubit Cepheus-1-108Q quantum system is now generally available on Rigetti QCS, Amazon Braket, Microsoft Azure Quantum, and qBraid. Kulkarni reiterated the company's focus on "disciplined execution."
Competitive Landscape and Industry Developments
D-Wave Quantum (QBTS) announced a gate-model roadmap on Monday, targeting 100 logical qubits and more than 1 million operations by 2032. Logical qubits are error-corrected units built from physical qubits. D-Wave shares rose 2.9% in late morning trading, while IonQ (IONQ) slipped 0.5%.
Quantum computing stocks are poised for increased attention as Quantinuum, Honeywell's quantum arm, increased the target size of its planned IPO to $1.46 billion, according to Barron's. This would bring another well-capitalized quantum company to public markets.
Bear Case and Risks
Despite the optimism, Rigetti faces a clear bear case. The company's valuation is built on future milestones that could be years away, with limited revenue and ongoing losses. TD Cowen analyst Krish Sankar downgraded the stock in February, citing a "premium valuation" and the potential need for capital to fund a $200 million fabrication plant.
Form 144 filings have surfaced again, flagging insider-sale notices that indicate planned sales of restricted or control shares, though they do not confirm the shares have been sold. These filings add another layer of scrutiny for market watchers.
Rigetti's next corporate event is its virtual stockholder meeting on June 9 at 9 a.m. Pacific. Until then, trading in the stock is expected to remain driven by funding updates, research developments, headlines from rivals, and a market that continues to attach a premium to quantum computing stories.
