Rigetti Computing shares ended Tuesday up 4.9% at $26.88, pushing the quantum computing firm's market capitalization to approximately $9.0 billion. The stock's advance came as traders parsed new insider filings and weighed a proposed $100 million funding agreement with the U.S. Commerce Department.
Insider Transactions Raise Eyebrows
Filings from June 1 and June 2 revealed notable insider sales. CEO Subodh Kulkarni sold 61,000 shares on June 1 after exercising options, with a weighted average price of $24.3781. The filing indicated the sales were to cover option exercise costs or taxes. Similarly, Chief Technology Officer David Rivas sold 499,328 shares on May 29, also following option exercises, at a weighted average of $25.396. After the sale, Rivas retained 325,945 shares.
Additionally, a Form 144 showed director Michael Clifton intends to sell 156,250 warrants worth approximately $2.28 million, and he reported a May 21 sale of 50,000 warrants for $500,000. While these filings do not necessarily signal a change in the company's business outlook, they come at a time when the stock is already sensitive to government funding news and retail investor interest.
Government Funding Proposal
On May 21, Rigetti announced it had signed a letter of intent with the U.S. Commerce Department for up to $100 million over three years to support its superconducting quantum-computing research and development. The company stated that the plan includes the government taking an equity stake. CEO Kulkarni noted that the funding could allow Rigetti to “tackle key scaling bottlenecks” more quickly. However, the deal is not final, and any new equity issuance could dilute existing shareholders.
Peers Also Move
Other quantum computing stocks showed mixed performance. IonQ last traded at $71.40, up 3.1%, while D-Wave Quantum gained 2.6% to $29.91. Quantum Computing Inc. fell 1.2% to $12.25. D-Wave also has a $100 million CHIPS Act funding proposal pending with the Commerce Department, which would involve issuing $100 million in common stock if approved. CEO Alan Baratz called it a “transformative moment,” highlighting the industry's reliance on federal support.
Financials and Outlook
Rigetti remains a small operator. For the first quarter ended March 31, the company reported revenue of just $4.4 million and an operating loss of $26.0 million. It held $569.0 million in cash, cash equivalents, and available-for-sale investments. CEO Kulkarni emphasized “disciplined execution” as the company sticks to its roadmap.
The company's flagship product is the 108-qubit Cepheus-1-108Q machine, which uses chiplets—small processor units connected instead of a single large chip. Rosenblatt Securities analyst John McPeake wrote in Barron's earlier this year that error rates need to fall for Rigetti but maintained a Buy rating with a $40 price target.
Risks Remain
The Commerce Department pact is not a final deal, and any new equity sales could hurt current shareholders. The company has cautioned that nothing is set regarding final agreements, timing, funding, technical targets, or customer shipments. If government funds are delayed or technical milestones are missed, shares trading well above actual revenue could decline sharply.
Broader market conditions also pose risks. U.S. stock index futures held steady near record levels on Wednesday, with oil prices rising amid Middle East tensions, according to Reuters. Such a backdrop tends to leave high-growth, loss-making tech names vulnerable if risk appetite shifts.
