Track market-moving stories before they get noisy

Rigetti Computing, Inc. (RGTI - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Over the past month, shares of this company have returned -30.4%, compared to the Zacks S&P 500 composite's -1.2% change. During this period, the Zacks Internet - Software industry, which Rigetti Computing falls in, has lost 5.8%. The key question now is: What could be the stock's future direction?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Rigetti Computing is expected to post a loss of $0.05 per share, indicating a change of -66.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

For the current fiscal year, the consensus earnings estimate of -$0.19 points to a change of +70.3% from the prior year. Over the last 30 days, this estimate has remained unchanged.

For the next fiscal year, the consensus earnings estimate of $0.19 indicates a change of +2.1% from what Rigetti Computing is expected to report a year ago. Over the past month, the estimate has remained unchanged.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Rigetti Computing is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For Rigetti Computing, the consensus sales estimate for the current quarter of $3.89 million indicates a year-over-year change of +99.6%. For the current and next fiscal years, $24.55 million and $71.21 million estimates indicate +246.4% and +190% changes, respectively.

Last Reported Results and Surprise HistoryRigetti Computing reported revenues of $5.14 million in the last reported quarter, representing a year-over-year change of +185.6%. EPS of -$0.05 for the same period compares with -$0.05 a year ago.

Compared to the Zacks Consensus Estimate of $4.91 million, the reported revenues represent a surprise of +4.58%. The EPS surprise was -66.67%.

Over the last four quarters, Rigetti Computing surpassed consensus EPS estimates three times. The company topped consensus revenue estimates two times over this period.

ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Rigetti Computing is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Rigetti Computing. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Key Takeaways Rigetti's Q2 revenues jumped to $5.1M from $1.8M, driven by Novera system sales and related products.RGTI's dependence on major contracts and two key customers raises concerns over quarterly revenue volatility.Rigetti's operating expenses surged 48% to $30.3M, while its $541.3M liquidity supports continued investments.
Rigetti Computing (RGTI - Free Report) is making progress in commercializing its quantum computing technology, but revenue concentration and unpredictable contract timing continue to cloud its near-term growth outlook. Second-quarter 2026 revenues increased to $5.1 million from $1.8 million in the prior-year quarter, driven primarily by sales of its 9-qubit Novera systems and related products. However, the company remains reliant on a limited customer base, with two customers accounting for 64% and 16% of quarterly revenues, respectively.

Moreover, the $8.4 million quantum computing system order from India’s C-DAC is expected to be recognized only after installation and acceptance testing in the fourth quarter of 2026. This highlights the potential for significant fluctuations in quarterly results as revenue recognition depends on the completion of large customer projects. Although demand for on-premises quantum systems and development contracts is gaining traction, Rigetti’s current offerings remain primarily research-oriented, limiting visibility into sustained, recurring commercial demand.

Meanwhile, Rigetti’s aggressive investments in quantum technology continue to weigh on profitability. Second-quarter 2026 operating expenses rose 48% year over year to $30.3 million, reflecting a 53% surge in research and development expenses to $20.7 million. Consequently, the company reported an operating loss of $28.1 million. Management expects substantial investments in R&D, cryogenic infrastructure and fabrication capacity to continue as Rigetti advances its technology roadmap.

While its $541.3 million liquidity position provides considerable financial flexibility to fund these initiatives, persistent operating losses and elevated capital requirements remain concerns. Potential shareholder dilution also warrants attention if funding needs increase. For now, Rigetti’s long-term opportunity rests on translating technological progress and growing customer interest into a more predictable revenue stream, while managing costs and improving the commercial viability of its quantum computing systems.

Peers Updates

D-Wave Quantum (QBTS - Free Report) finalized a definitive agreement with the U.S. Department of Commerce for up to $100 million in CHIPS Act funding to advance its quantum technology roadmap, reinforcing its position as a dual-platform provider of annealing and gate-model quantum systems. While the company reported a wider-than-expected second-quarter 2026 loss, missed revenue estimates and weaker adjusted gross margins, it continued to build commercial momentum through stronger bookings, deeper engagements with major global organizations and progress across its technology roadmap.

IonQ (IONQ - Free Report) signed an $8.18 million commercial agreement with Congruity360 to integrate its post-quantum cryptography and quantum key distribution appliances into the latter's enterprise data management platform, strengthening its foothold in the enterprise cybersecurity market. The company also advanced its hardware roadmap with the launch of Superion 256, its sixth-generation quantum computing platform, after fabricating its first integrated 256-qubit quantum processing units with SkyWater and successfully trapping the first ions in prototype systems across multiple U.S. facilities.  

RGTI's shares have plunged 21% in a month, as widening losses and valuation concerns clash with strong liquidity, government funding and quantum growth prospects.

SummaryRigetti Computing is transitioning from speculative hype to tangible progress, with operational milestones now driving its investment narrative.RGTI's $100 million U.S. government R&D funding and new commercial orders, like the $8.4 million C-DAC deal, signal growing validation and potential scalability.Despite a high P/S ratio of 347 and negative operating margins, RGTI's $541 million cash position and zero debt provide a financial cushion for continued growth.Key catalysts to watch include Q3 earnings, 108-qubit system deployment, and new commercial wins; long-term upside hinges on sustained technology and revenue progress.Editor's note: Seeking Alpha is proud to welcome AllinAllSpace Research as a new contributing analyst. You can become one too! Share your best investment idea by submitting your article for review to our editors. Get published, earn money, and unlock exclusive SA Premium access.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Key Takeaways Rigetti's 108-qubit Cepheus system faces coherence limits of 25-30 microseconds.Chip redesigns, fabrication upgrades and materials innovations could triple Rigetti's coherence times.RGTI is exploring tantalum-capped superconducting contacts to improve system performance.
Rigetti Computing (RGTI - Free Report) is shifting its focus toward improving quantum processor quality as it works to advance its next-generation computing systems. During its second-quarter 2026 earnings call, management identified coherence time as the primary technical hurdle affecting two-qubit gate fidelity in its flagship 108-qubit Cepheus system. Although Cepheus-1-108Q ranks among a limited group of generally available gate-based quantum computers with more than 100 qubits, its coherence times of approximately 25-30 microseconds continue to constrain computational reliability. This highlights a key challenge for Rigetti as it seeks to translate higher qubit counts into meaningful improvements in quantum processing capabilities.

To address these limitations, Rigetti is pursuing a combination of chip redesigns, fabrication process enhancements and materials innovations. The company is also exploring tantalum-capped superconducting contacts to help mitigate performance degradation. Management expects these efforts to potentially double or triple coherence times over the next several years, which could improve two-qubit gate fidelity and strengthen overall system performance. However, achieving these gains will depend on the successful execution of its engineering initiatives and the consistency of improvements across its quantum processors.

The progress of these initiatives will be an important factor in determining Rigetti's ability to advance toward larger and more commercially viable quantum systems. While increasing qubit capacity remains an important part of its technology roadmap, sustained improvements in coherence and gate performance will be essential to making quantum computing more reliable for practical applications. Investors will be watching whether Rigetti can deliver measurable performance gains alongside its ongoing efforts to scale its systems.

Peers UpdatesIonQ (IONQ - Free Report) recently signed an $8.18 million commercial agreement with Congruity360 to integrate quantum-safe networking capabilities into the latter’s enterprise data management platform. Under the agreement, Congruity360 will deploy IonQ’s post-quantum cryptography and quantum key distribution appliances to strengthen protection for sensitive enterprise data across its U.S. client base.

The companies described the agreement as one of the largest commercial quantum security deals announced in the United States, highlighting growing interest in next-generation cybersecurity solutions. The contract could help IonQ expand its commercial presence in quantum security and capitalize on enterprise demand for infrastructure designed to address emerging quantum-related cybersecurity risks.

Quantum Computing Inc. (QUBT - Free Report) recently entered into a three-year Framework Agreement with Hamad Bin Khalifa University in Qatar to advance collaborative initiatives spanning quantum computing, sensing and communications. The agreement covers joint research, executive education, industry-oriented projects, quantum application development and co-marketing activities designed to promote broader adoption of quantum technologies in Qatar and other markets.

The collaboration also aims to develop practical quantum-based solutions for real-world challenges while strengthening the regional talent pipeline. The partnership could expand QUBT’s academic and industry engagement, creating opportunities to advance application development and build awareness of its quantum technology offerings.

Rigetti’s Price Performance, Valuation and EstimatesShares of RGTI have lost 36.7% in the year-to-date period against the industry’s growth of 9.8%.

Image Source: Zacks Investment Research

From a valuation standpoint, Rigetti trades at a price-to-book ratio of 8.71, above the industry average. RGTI carries a Value Score of F.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Rigetti’s 2026 earnings implies a significant 70.3% improvement from the year-ago period.

Image Source: Zacks Investment Research

The company currently has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Conventional computers process information using bits, often represented as lines of binary code (0 or 1). Quantum computers use qubits to perform certain calculations in fundamentally different ways. Through a property known as superposition, qubits can exist in multiple states at the same time.

Quantum computing technology is promising to transform drug discovery, materials science, financial modeling, cybersecurity, and more. Given its various use cases, McKinsey estimates the quantum computing market could reach between $43 billion and $71 billion by 2035.

That opportunity has attracted enormous attention to pure-play quantum developers such as Rigetti Computing (RGTI -0.78%). Smart investors understand the difference between a revolutionary technology and buying a stock at an attractive valuation.

As of this writing (Oct. 8), Rigetti commands a market capitalization of roughly $4.7 billion despite generating relatively little revenue and no profits. Let's consider what Rigetti could look like in five years to assess if now is a good opportunity to buy the stock.

Image source: Getty Images.

Rigetti has promising technology, but lots of competition Rigetti specializes in superconducting quantum computers, an approach also being explored by technology giants such as Alphabet and IBM. This strategy centers on building quantum processors with modular chiplets, enabling multiple components to work together as systems scale.

Rigetti also operates its own fabrication facility and provides access to quantum computing through cloud-based services. This vertical integration gives the company considerable control over its technology stack.

Rigetti has also garnered the attention of major artificial intelligence (AI) infrastructure suppliers such as Hewlett Packard Enterprise, with which it is developing hybrid quantum-classical computing workflows. While these developments are encouraging, Rigetti faces stiff competition from IonQ, D-Wave Quantum, IBM, Google, and other quantum developers pursuing different technological approaches. Given the nascent state of quantum computing, no one knows which architecture will ultimately dominate.

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Rigetti's financials reveal a glaring problem Rigetti generated just $5.1 million in revenue during the second quarter while reporting an operating loss of $28.1 million. The company's net loss reached $52.6 million, although most of it was attributable to noncash accounting adjustments.

The company finished June with approximately $541 million in cash and investments and no debt besides some minor operating leases. That's reassuring, given that quantum computing requires substantial spending on research and development (R&D) and engineering.

Nevertheless, the company trades at a price-to-sales (P/S) ratio of 394. That's an unsustainable valuation for any business, let alone one without consistent profitability.

That leads me to my next concern: liquidity. Rigetti has been issuing stock over the past year to help fund the operation. If the company's outstanding share count continues to balloon to fund research, existing investors will own progressively smaller percentages of the business. This means the technology could succeed without shareholders necessarily enjoying equally spectacular returns.

RGTI Shares Outstanding (Quarterly) data by YCharts

Where could Rigetti stock be in 2031? Let's consider two scenarios. Suppose Rigetti generates $500 million in annual revenue by 2031 and commands a more mature valuation of 10 times sales. That produces a $5 billion market capitalization. In other words, Rigetti could increase annual revenue by nearly 7x compared to its trailing-12-month sales and still trade around today's valuation.

Now, imagine quantum computing becomes a major commercial opportunity by the next decade, and Rigetti evolves into a key supplier. If the company reaches $1 billion in revenue and still trades at 10 times sales, the company's market capitalization would reach $10 billion. This implies roughly 113% upside from today's level. With shares currently trading around $14, that bullish scenario implies a future stock price around $30.

While the math shows Rigetti's stock could double, both scenarios require exceptional execution and broader adoption of quantum computing within a relatively tight time frame. This is precisely why I wouldn't chase Rigetti simply because quantum computing sounds like an exciting opportunity.

This analysis is meant to show how Rigetti's valuation already prices in significant commercial success. For investors willing to tolerate volatility and uncertainty, Rigetti stock could be a speculative hold rather than a compelling long-term buy at today's price. For investors seeking broader exposure to artificial intelligence (AI) and who want to participate in the potential upside of quantum computing, blue chip stocks like Alphabet or IBM are a better bet.

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?

Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Rigetti Computing, Inc. (RGTI - Free Report) .

Rigetti Computing currently has an average brokerage recommendation (ABR) of 1.85, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 13 brokerage firms. An ABR of 1.85 approximates between Strong Buy and Buy.

Of the 13 recommendations that derive the current ABR, eight are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 61.5% and 7.7% of all recommendations.

Brokerage Recommendation Trends for RGTI

Check price target & stock forecast for Rigetti Computing here>>>

While the ABR calls for buying Rigetti Computing, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.

Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.

Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.

On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.

Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.

Should You Invest in RGTI?In terms of earnings estimate revisions for Rigetti Computing, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at -$0.19.

Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Rigetti Computing. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Rigetti Computing.

Is the future of computing quantum or conversational? Investors deciding between Rigetti Computing (RGTI -2.00%) and SoundHound AI (SOUN +1.68%) must choose which high-growth technology offers the better long-term potential for their portfolios.

Rigetti is a pioneer in building superconducting quantum computers, while SoundHound provides voice-enabled artificial intelligence software for diverse industries. They are being compared because both represent small-cap bets on the next generation of artificial intelligence, though they operate at opposite ends of the hardware and software spectrum.

The case for Rigetti ComputingRigetti sells superconducting quantum processors and cloud-based quantum services to research and commercial clients. The company remains a pioneer among tech stocks, particularly within the nascent quantum hardware industry. It serves customers through its Quantum Cloud Services platform, targeting complex problems in fields like climate simulation and drug discovery. Major partners include Amazon (AMZN -0.05%) and Microsoft (MSFT +1.89%), which provide broad cloud access to its hardware. Significant government clients like DARPA also utilize its technology, and such customer concentration adds a layer of risk to the business.

In FY 2025, according to its latest annual report, revenue reached nearly $7.1 million. This represented a decline of approximately 34.3% compared to the prior year. The company reported a net loss of roughly $216.2 million for the same period. This resulted in a negative net margin of approximately 3,050.4%, highlighting the intense research and development costs required to build and scale quantum processors.

As of its December 2025 balance sheet, the debt-to-equity ratio was 0.0x. This ratio, which compares total debt to shareholder equity, indicates the company currently carries no debt on its books. The current ratio, measuring the ability to pay short-term bills with short-term assets, was approximately 37.4x. Free cash flow for FY 2025 was nearly negative $77.2 million. Free cash flow represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

The case for SoundHound AISoundHound creates voice-enabled AI software used in cars, restaurants, and smart devices. Its Houndify platform allows businesses to build natural conversational interfaces for their products. The company recently completed the acquisition of LivePerson, which helped integrate advanced customer engagement and agentic AI tools into its stack. SoundHound serves various sectors, including automotive and hospitality, through royalties and subscription contracts. Revenue is primarily derived from these long-term service contracts and the monetization of voice-enabled interactions.

In FY 2025, revenue reached nearly $168.9 million, an increase of approximately 99.4% over previous results. The company reported a net loss of roughly $14.0 million for the fiscal year. This narrowed its negative net margin to approximately 8.3%, indicating that the business is scaling its voice AI services more efficiently than in previous periods. This top-line growth reflects the increasing demand for conversational AI across enterprise and consumer markets.

As of its December 2025 balance sheet, the debt-to-equity ratio was 0.0x. This indicates that the company has no total debt relative to its shareholder equity. The current ratio was roughly 4.6x, measuring the company's ability to cover its short-term debts with its short-term assets. Free cash flow for FY 2025 was approximately negative $103.1 million. This reflects the significant cash burn required to scale its software platform and integrate large acquisitions like LivePerson.

Risk profile comparisonRigetti faces risks as an early-stage company with significant accumulated deficits and a continued need for external capital to fund operations. There are substantial technological hurdles to achieving quantum advantage, and failing to meet development milestones could hurt investor confidence. High customer concentration is another factor, with much of its revenue coming from a few government entities and cloud partners. Global competition from well-funded sovereign programs and giant technology firms remains intense in the quantum space.

SoundHound deals with persistent cash burn as it scales its operations to compete in the crowded AI software market. The company faces significant execution risks following the integration of LivePerson, which could impact its financial stability if synergies are not realized. Competition from larger technology companies like Amazon or Microsoft presents ongoing pricing pressure and may limit market share. There are also potential regulatory hurdles regarding the use of generative AI technologies and data privacy concerns that could impact adoption.

Valuation comparisonNeither company currently has a positive Forward P/E based on future earnings estimates, so investors often look to the P/S ratio for comparison. The P/S ratio measures a stock's market value against its sales over the past twelve months.

MetricRigetti ComputingSoundHound AIForward P/EN/AN/AP/S ratio379.6x12.5xValuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.

I'd go with SoundHound AI, though neither company is a comfortable pick right now. Both are unprofitable and asking investors to bet on technologies still finding their commercial footing.

But SoundHound has something Rigetti is still working toward: a growing base of paying enterprise customers across healthcare, automotive, and restaurant industries. Revenue grew at a strong double-digit rate in the most recent quarter, the company raised its full-year outlook, and the voice AI platform is winning new enterprise customers across multiple industries.

Rigetti has made progress on its quantum hardware, and a CHIPS Act funding letter adds a layer of government validation. But revenue remains small, and the gap between its bookings momentum and actual recognized revenue is something investors need to understand before buying in.

Both stocks are speculative and carry significant risk. But SoundHound is closer to building a durable commercial business, and for a patient investor comfortable with early-stage volatility, that gives it a modest edge right now.

Rigetti Computing, Inc. (RGTI - Free Report) closed the most recent trading day at $15.74, moving -1.32% from the previous trading session. The stock's performance was behind the S&P 500's daily loss of 0.17%. At the same time, the Dow lost 0.26%, and the tech-heavy Nasdaq lost 0.09%.

Coming into today, shares of the company had gained 1.85% in the past month. In that same time, the Computer and Technology sector gained 3.58%, while the S&P 500 lost 0.24%.

Market participants will be closely following the financial results of Rigetti Computing, Inc. in its upcoming release. The company's earnings per share (EPS) are projected to be -$0.05, reflecting a 66.67% decrease from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $3.89 million, up 99.64% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of -$0.19 per share and a revenue of $24.55 million, demonstrating changes of +70.31% and +246.36%, respectively, from the preceding year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Rigetti Computing, Inc. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. At present, Rigetti Computing, Inc. boasts a Zacks Rank of #5 (Strong Sell).

The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 93, this industry ranks in the top 38% of all industries, numbering over 250.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow RGTI in the coming trading sessions, be sure to utilize Zacks.com.

In the latest trading session, Rigetti Computing, Inc. (RGTI - Free Report) closed at $16.01, marking a -3.12% move from the previous day. The stock's performance was behind the S&P 500's daily loss of 0.76%. Meanwhile, the Dow lost 0.68%, and the Nasdaq, a tech-heavy index, lost 1.13%.

The company's stock has dropped by 2.48% in the past month, falling short of the Computer and Technology sector's gain of 6.68% and the S&P 500's gain of 1.26%.

Investors will be eagerly watching for the performance of Rigetti Computing, Inc. in its upcoming earnings disclosure. The company's upcoming EPS is projected at -$0.05, signifying a 66.67% drop compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $3.89 million, up 99.64% from the prior-year quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of -$0.19 per share and a revenue of $24.55 million, representing changes of +70.31% and +246.36%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Rigetti Computing, Inc. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Rigetti Computing, Inc. presently features a Zacks Rank of #5 (Strong Sell).

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 82, putting it in the top 34% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Rigetti Computing (RGTI -0.06%) looks exciting on the surface: There's government money, cutting‑edge hardware, and big language about utility‑scale quantum computers. But when you dig into the company's own numbers and plans, it looks like the stock could easily turn into a trap rather than the bargain it appears to be. Here are three reasons.\

No. 1: A small business with very ambitious promises Rigetti's 2026 news releases make it clear the company is still a very small business trying to build a very big future. For the first quarter of 2026, total revenue was just $4.4 million, with an operating loss of $26 million and an adjusted net loss of $14.7 million. And the second quarter brought $5.1 million of revenue against a $28.1 million operating loss and an adjusted net loss of $16 million.

Image source: Getty Images.

The company ended the second quarter with $541.3 million of cash and investments and no debt, which sounds comforting. But when you compare that cash pile and revenue to the size of the losses and the scale of the road map management keeps talking about, you are reminded that this is still a pre‑profit, high‑burn story.

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On the technology side, Rigetti is doing interesting things. Its Cepheus‑1‑108Q chip validates a chiplet‑based architecture and is now available through its cloud, but those milestones have not yet turned into a business that can stand on its own cash flows, as you can see from this year's numbers.

If you buy the stock because the government and big partners are interested, without matching that against how small the current business is, it is easy to treat a speculative research platform like a mature company or a hype ticker.

No. 2: Government funding is helpful, but not as bullish as you think This month, Rigetti signed a definitive agreement with the U.S. Department of Commerce for up to $100 million in CHIPS Act funding to accelerate research and development of superconducting quantum computing.
The program provides funds for three big projects: miniaturizing readout electronics, hugely expanding cryogenic capacity with a new cryostat design, and developing fabrication for high‑connectivity chips -- all of which are important if you care about scaling up quantum machines.

However, the details matter. The Commerce Department made $43.9 million available shortly after the award date, but the remaining $56.1 million is split into two tranches contingent on Rigetti meeting specific technical and milestone criteria. And the government retains the right to claw back funds if the company fails to perform or materially breaches the agreement.

On top of that, Rigetti agreed to issue 7,739,938 shares of common stock to the department at an implied price of $12.92 per share, giving the government a minority equity stake and diluting existing shareholders.

In other words, the CHIPS award isn't free money. It comes with milestones and dilution, and if quantum projects take longer than expected, that funding could become a burden.

No. 3: Long timelines and execution risk Management seems very open about the fact that its road map is measured in years, not quarters. In its recent materials and earnings call, the company described the government program as a three‑year effort aimed at pushing toward utility‑scale quantum computing, while also noting that delivery of key systems tied to these programs is not expected until 2027.

Later on in the company's earnings call, management said customers are giving strong feedback on its 108-qubit system, calling it reliable, consistent, and easy to use. But it acknowledged that the quantum advantage is still a ways out before it can support practical workloads.

I'm cynical here because Rigetti has been volatile over the last couple of years, and a lot of the stock's momentum has come from bullish announcements. I'd rather see real progress on its road map and from management before buying shares. If those milestones slip or better-funded rivals pull ahead, investors could be left waiting years for the commercial traction the story promises.

Rigetti Computing (RGTI -1.44%) has turned a $10,000 investment made three years ago into over $80,000. That's a more than 700% return, even though it's currently 73% off its peak during that period.

Despite the current price discount, I still wouldn't touch the quantum computing stock. Here's what's driving the stock, and why it's not right for me.

Image source: The Motley Fool.

Not the right combination for my situationRigetti Computing went public in early 2022 after completing its merger with a special purpose acquisition company, valuing the quantum computing start-up at $1.5 billion. It languished for a few years before taking off in late 2024, due to growing investor optimism in the sector. At one point, the stock was up about 3,000% from its low point in late 2023. While the quantum computing stock has come down sharply from that euphoric peak as investors have tempered their expectations, it's still worth over $5 billion.

That nauseating volatility is one reason why I won't touch Rigetti Computing stock. I'm starting to position my portfolio to support an early retirement and want to reduce its volatility.

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A couple of factors are driving that volatility. Rigetti is still a very early stage company. It reported only $5.1 million in revenue during the second quarter, while its operating loss totaled $28.1 million. As a result, it's burning through cash ($32 million in net cash used in operating activities during the first six months of this year). On a more positive note, the company ended the second quarter with $541 million in cash and available short-term investments, giving it a strong position to continue funding its growth. It also signed a letter of intent with the U.S. Department of Commerce for up to $100 million in funding over three years to accelerate superconducting quantum computing research and development. However, with no profit and low revenue, Rigetti trades at a nose-bleed valuation at more than 375 times sales.

While Rigetti Computing has tremendous promise, its volatility, money-losing business, and sky-high valuation aren't right for my situation. That's why I won't touch the stock despite the big drop from the peak.

Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Quantum computers can be better at processing data-heavy workloads in areas like science and cryptography, because they can use a concept called superposition to simulate multiple solutions to a problem at the same time. However, even the best quantum systems today are still making far too many errors to solve complex real-world problems.

Rigetti Computing (RGTI +8.11%) is one of the industry leaders right now, and it's making genuine progress. But considering even the company's most powerful quantum computers aren't overly useful yet, it's struggling to generate meaningful sales, so it's burning through truckloads of cash while it continues to conduct research and development.

That creates a problem for shareholders, because Rigetti stock is trading at a sky-high valuation, which opens the door to potential downside if the company can't find a way to bring in significantly more revenue in the near future. Here's why I predict the stock will plummet over the next 12 months.

Image source: Getty Images.

Exciting technology, but concerning financial numbers Rigetti built its own fabrication facility to produce chips, developed its own quantum programming language, and even created its own cloud platform, which it can rent to other businesses, thereby monetizing quantum computing capacity. By effectively operating its own end-to-end supply chain, the company can bring new systems to market much faster than many of its competitors.

Rigetti's Cepheus-1-108Q is one of the industry's largest multichip quantum systems. It boasts a single-qubit gate fidelity of 99.9%, meaning it can be expected to make one error per every 1,000 quantum operations. But qubits are very sensitive to interference, so getting two of them to work together in harmony is one of the industry's greatest challenges. As a result, Cepheus-1-108Q has a 2-qubit gate fidelity of just 99.1%, implying nine errors per 1,000 operations.

Solving complex real-world problems would require an error rate of around one in 1 million, or even one in 1 billion in some cases. Therefore, although Cepheus-1-108Q is objectively powerful by industry standards, it still isn't overly useful. Rigetti thinks it could take another three years to achieve a 2-qubit gate fidelity of 99.9%, and it will require improved chip designs, materials, and fabrication processes.

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As a result, Rigetti is generating minimal sales. Its revenue totaled just $5.1 million during the second quarter of 2026, and although that represented a whopping 185% increase compared to the year-ago period, it's a tiny amount of money relative to the company's market capitalization of $5 billion.

Rigetti's second-quarter revenue also paled in comparison to its $30.2 million in operating costs, resulting in a significant net loss of $52.6 million at the bottom line. The company had $541 million in cash and cash equivalents on hand at the end of the quarter, so it can sustain its losses for the foreseeable future. However, since it could take years to develop commercially viable quantum systems, I wouldn't rule out the need for a cash injection in the future through a debt or equity offering.

Rigetti stock could face sharp losses over the next 12 months Based on Rigetti's minuscule revenue and its hefty market cap, its stock is trading at a price-to-sales (P/S) ratio of 374. For some perspective, that makes Rigetti a whopping 61 times more expensive than the Nasdaq-100 index, which has a P/S ratio of 6.1, suggesting it's heavily overvalued compared to a basket of America's highest quality technology companies.

Even if we value Rigetti stock based on Wall Street's average 2027 revenue estimate of $44.1 million (provided by Yahoo Finance), its forward P/S ratio is still a sky-high 114.

RGTI PS Ratio data by YCharts

Even if Rigetti's stock crashed by 95% over the next 12 months, it would still be more expensive than the Nasdaq-100. I'm not predicting a decline that steep because I'm sure many investors will hold stocks like Rigetti for the long term regardless of their valuation, simply because of the potential of quantum computing.

However, I think the stock could easily fall below $10 over the next year, and potentially even hit $5 if the company fails to meet Wall Street's revenue expectations.

It's worth noting that Ark Investment Management, which is run by seasoned tech investor Cathie Wood, thinks it could take 20 to 40 years for quantum computers to become truly disruptive in areas like cryptography. If that timeline proves accurate, Rigetti will have to raise a lot more cash to fund its operations, which will likely dilute the holdings of every existing investor. That will be a major drag on future returns.

In the latest close session, Rigetti Computing, Inc. (RGTI - Free Report) was down 1.18% at $15.09. The stock's change was less than the S&P 500's daily loss of 0.45%. Elsewhere, the Dow saw a downswing of 0.63%, while the tech-heavy Nasdaq depreciated by 0.78%.

The stock of company has fallen by 18.21% in the past month, lagging the Computer and Technology sector's loss of 1.27% and the S&P 500's loss of 1.99%.

The investment community will be paying close attention to the earnings performance of Rigetti Computing, Inc. in its upcoming release. It is anticipated that the company will report an EPS of -$0.05, marking a 66.67% fall compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.89 million, up 99.64% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of -$0.19 per share and a revenue of $24.55 million, representing changes of +70.31% and +246.36%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Rigetti Computing, Inc. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. At present, Rigetti Computing, Inc. boasts a Zacks Rank of #5 (Strong Sell).

The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 85, positioning it in the top 35% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

Rigetti Computing, Inc. (RGTI - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Over the past month, shares of this company have returned -18.2%, compared to the Zacks S&P 500 composite's -2% change. During this period, the Zacks Internet - Software industry, which Rigetti Computing falls in, has gained 4.2%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Rigetti Computing is expected to post a loss of $0.05 per share, indicating a change of -66.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The consensus earnings estimate of -$0.19 for the current fiscal year indicates a year-over-year change of +70.3%. This estimate has remained unchanged over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $0.19 indicates a change of +2.1% from what Rigetti Computing is expected to report a year ago. Over the past month, the estimate has remained unchanged.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #5 (Strong Sell) for Rigetti Computing.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

For Rigetti Computing, the consensus sales estimate for the current quarter of $3.89 million indicates a year-over-year change of +99.6%. For the current and next fiscal years, $24.55 million and $71.21 million estimates indicate +246.4% and +190% changes, respectively.

Last Reported Results and Surprise HistoryRigetti Computing reported revenues of $5.14 million in the last reported quarter, representing a year-over-year change of +185.6%. EPS of -$0.05 for the same period compares with -$0.05 a year ago.

Compared to the Zacks Consensus Estimate of $4.91 million, the reported revenues represent a surprise of +4.58%. The EPS surprise was -66.67%.

Over the last four quarters, Rigetti Computing surpassed consensus EPS estimates three times. The company topped consensus revenue estimates two times over this period.

ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Rigetti Computing is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Rigetti Computing. However, its Zacks Rank #5 does suggest that it may underperform the broader market in the near term.

Rigetti Computing, Inc. carries roughly a $4.9B premium to cash, even though recurring system access revenue remains small and results are still driven mainly by uneven hardware and project sales. Commercial adoption remains limited, with most revenue from research contracts and hardware sales, while system access revenue remained at $143K H1 2026. Gross profit covers 7% of operating expenses. Rigetti is still far from break-even despite having enough liquidity to support continued development.

Subodh K. Kulkarni, President and Chief Executive Officer of Rigetti Computing, Inc. (RGTI -0.53%), sold 120,000 shares of common stock on September 9, 2026, for approximately $1.9 million, according to the SEC Form 4 filing.

Transaction summaryMetricValueTransaction value$1.9 millionShares sold (directly held)120,000Post-transaction shares (directly held)140,411Post-transaction value$2.14 millionTransaction value based on SEC Form 4 weighted average sale price ($15.68); post-transaction value based on September 09, 2026 market close ($15.24).

Key questionsWhat prompted this disposition of common stock?
Subodh K. Kulkarni exercised 150,000 options at $0.96 per share and subsequently sold 120,000 shares. This resulted in a net increase of 30,000 shares to his direct equity position, which now totals 140,411 shares valued at $2.14 million as of the September 9, 2026 market close.How is the transaction structured in relation to regulatory trading plans?
The sale was conducted under a Rule 10b5-1 trading plan adopted on June 10, 2026. These plans allow corporate insiders to establish predetermined trade schedules, providing a structured mechanism for liquidity that is decoupled from immediate market fluctuations or non-public developments.What remains of the executive's derivative compensation following this filing?
After exercising 150,000 options, the CEO continues to hold 100,000 derivative securities. This remaining balance, alongside the direct equity stake, ensures continued alignment with long-term performance objectives.How does the execution price compare to the company's market performance?
The 120,000 shares were sold at a weighted average price of $15.68, while the stock closed at $15.24 on the transaction date. This activity occurred while Rigetti Computing shares had produced a one-year return of -8% as of the September 9, 2026 market close.Company OverviewMetricValueShare Price (as of market close 2026-09-10)$15.16Market Capitalization$5.0 billionRevenue (TTM)$13.4 millionNet Income (TTM)-$238.7 millionCompany SnapshotRigetti Computing develops and manufactures full-stack quantum computing systems, specifically superconducting quantum processors, and provides access to these machines through its Quantum Cloud Services platform across public, private, and hybrid cloud environments.The company generates revenue through quantum computing hardware sales and cloud-based quantum computing services, positioning itself as a vertically integrated provider of quantum computing solutions.Rigetti serves enterprise customers, research institutions, and technology partners seeking to access quantum computing capabilities for computational research, algorithm development, and emerging quantum applications.Rigetti Computing operates as a full-stack quantum computing enterprise with a market cap of $5 billion, leveraging its proprietary superconducting quantum processor technology and cloud delivery model to address the nascent but rapidly expanding quantum computing market.

The company's integrated approach -- combining hardware manufacturing with accessible cloud services -- positions it to capture value across the quantum computing value chain. With headquarters in Berkeley, California, Rigetti maintains a focused organizational structure dedicated to advancing quantum processor performance and expanding enterprise adoption of quantum computing solutions.

What this transaction means for investorsCEO Subodh Kulkarni's Sept. 9 sale of Rigetti Computing stock occurred a day after the company announced the signing of a definitive agreement with the U.S. Department of Commerce for $100 million in federal funding. The timing appears coincidental, since the executive's disposition was a non-discretionary transaction executed as part of a pre-established Rule 10b5-1 plan.

Kulkarni's disposal involved the exercise of 150,000 stock options and immediate sale of 120,000 of the resulting shares. This is a typical move made by insiders as part of routine liquidity management, since executives often own a lot of shares in their company.

Rigetti Computing's acceptance of federal funds is important. It signals that the company's quantum computer technology is compelling enough to attract the government's investment.

Moreover, from a practical perspective, the money provides Rigetti with a large infusion of cash. The company reported only $5.1 million in second-quarter revenue, yet suffered a net loss of $52.6 million. Constructing cutting-edge quantum tech is not cheap.

Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Key Takeaways Rigetti secures a definitive $100 million CHIPS award to advance superconducting quantum computing R&D.Funding supports miniaturized readout electronics, expanded cryogenic capacity and chip fabrication.Rigetti targets scalability bottlenecks that could reduce system costs and shorten development timelines. Rigetti Computing (RGTI - Free Report) secured a definitive $100 million award from the U.S. Department of Commerce under the CHIPS Act Research and Development Office to accelerate research and development aimed at scaling superconducting quantum computing. The funding marks a significant government-backed validation of Rigetti's technology and will support efforts to overcome critical engineering hurdles that have long constrained the development of utility-scale quantum computers. As part of the agreement, the Department will receive a minority, non-controlling equity stake in the company.

The funding will be deployed across three strategic R&D initiatives aligned with Rigetti's long-term technology roadmap. These include developing miniaturized integrated readout electronics, expanding cryogenic capacity through a next-generation cryostat architecture capable of supporting substantially larger systems and advancing fabrication capabilities for high-connectivity chip architectures. The projects are designed to address some of the biggest scalability bottlenecks in superconducting quantum computing, potentially reducing system costs, shortening development timelines and strengthening Rigetti's position as governments increasingly invest in quantum technologies for national security, AI, cryptography and scientific research.

Peers UpdatesIonQ (IONQ - Free Report) signed an $8.18 million commercial agreement with Congruity360 to integrate its post-quantum cryptography and quantum key distribution appliances into the latter's enterprise data management platform. The partnership, one of the largest commercial quantum security deals announced in the United States, aims to enhance protection for sensitive enterprise data by deploying quantum-safe networking capabilities, expanding IonQ's presence in the growing enterprise cybersecurity market.

Recently, IonQ also unveiled Superion 256, its sixth-generation quantum computing platform and the first system in its next-generation Superion family, marking a key milestone in its hardware roadmap. The company has already fabricated its first fully integrated 256-qubit quantum processing units with subsidiary SkyWater and successfully trapped the first ions in prototype systems being built across multiple U.S. facilities.

D-Wave Quantum (QBTS - Free Report) also executed a definitive agreement with the U.S. Department of Commerce, securing access to up to $100 million in funding under the CHIPS and Science Act, following a previously announced Letter of Intent. The funding is expected to support the company's quantum technology development efforts, reinforcing its position as a dual-platform quantum computing provider offering annealing and gate-model systems, software and services while advancing U.S.-backed quantum innovation.

Recently, QBTS exited the second quarter of 2026 with a wider-than-expected loss, with revenues missing estimates.  Additionally, the contraction of adjusted gross margin in the quarter was discouraging.

On a positive note, during the quarter, QBTS expanded commercial momentum through stronger bookings and engagements with major global organizations, while achieving milestones across its dual-platform technology roadmap. 

Rigetti’s Price Performance, Valuation and EstimatesShares of RGTI have lost 31.1% in the year-to-date period against the industry’s growth of 0.6%.

Image Source: Zacks Investment Research

From a valuation standpoint, Rigetti trades at a price-to-book ratio of 9.46, above the industry average. RGTI carries a Value Score of F.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Rigetti’s 2026 earnings implies a significant 70.3% improvement from the year-ago period.

Image Source: Zacks Investment Research

The company currently has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

RGTI faces widening losses, lumpy revenues and execution risks even as government backing and partnerships support its quantum roadmap.

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BERKELEY, Calif., Sept. 08, 2026 (GLOBE NEWSWIRE) -- Rigetti Computing, Inc. (Nasdaq: RGTI) (“Rigetti” or the “Company”), a pioneer in full-stack quantum-classical computing, today announced that its wholly owned subsidiary, Rigetti & Co, LLC, has signed a definitive agreement with the U.S. Department of Commerce (the “Department”) for an award of $100 million in funding to accelerate superconducting quantum computing R&D.

The funding is allocated under the CHIPS Research and Development Office Broad Agency Announcement pursuant to the CHIPS Act.

Under this definitive agreement, Rigetti will pursue three R&D projects that aim to address major technical bottlenecks in scaling superconducting quantum computing and will accelerate the Company’s roadmap towards utility-scale quantum computing:

Compressing readout electronics into an integrated, miniaturized packageExpanding cryogenic capacity by orders of magnitude using a new cryostat architectureDeveloping the fabrication capabilities for high-connectivity chip architectures
Quantum computing has tremendous promise to dramatically transform critical areas including cryptography, chemistry, materials science, mathematical optimization, and AI/machine learning. Governments worldwide are investing in this emerging technology given the national security and economic implications of quantum advantage.

“We are proud to be selected by the U.S. government to accelerate R&D and progress against our roadmap to deliver commercially viable quantum computing capabilities,” says Dr. Subodh Kulkarni, Rigetti CEO. “Solving crucial challenges in scaling gives us the opportunity to transform the industry by putting large-scale quantum computers in the hands of America’s quantum computing researchers faster. Shortening the time to build quantum systems at scale and reducing their cost will also allow for broader adoption, which will strengthen our domestic quantum computing ecosystem.”

The Department will receive a minority, non-controlling equity stake in Rigetti as a condition for receiving the funds to enhance the return for the U.S. taxpayer.

About Rigetti
Rigetti is a pioneer in full-stack quantum computing. Rigetti quantum computers are based on superconducting qubits, which are widely believed to be the leading qubit modality given their maturity, clear path to scaling, and fast gate speeds. Rigetti quantum computing systems achieve gate speeds of 50-70 nanoseconds, which is about 10,000 times faster than trapped-ion systems and 100 times faster than neutral-atom systems.

Rigetti sells on-premises 9-qubit to 108-qubit quantum computing systems, which support national laboratories and quantum computing centers. Rigetti’s Cepheus 36-qubit to 108-qubit systems are based on the Company’s proprietary chiplet-based technology and include the Company’s control electronics. Rigetti’s 9-qubit Novera QPU supports a broader R&D community with a high-performance, on-premises QPU designed to plug into a customer’s existing cryogenic and control systems.

The Company operates quantum computers over the cloud through its Rigetti Quantum Cloud Services (QCS) platform, enabling global enterprise, government, and research clients to pursue R&D. The Company’s proprietary quantum-classical infrastructure provides high-performance integration with public and private clouds for practical quantum computing.

Rigetti developed the industry’s first multi-chip quantum processor for scalable quantum computing systems. Leveraging this proprietary technology, Rigetti deployed the industry’s largest multi-chip quantum computer in 2026 with Cepheus-1-108Q, based on twelve 9-qubit chiplets tiled together. The Company designs and manufactures its chips in-house at Fab-1, the industry’s first dedicated and integrated quantum device manufacturing facility. Learn more at https://www.rigetti.com/.

Rigetti Media Contact
[email protected]

Cautionary Language and Forward-Looking Statements

Certain statements in this communication may be considered “forward-looking statements” within the meaning of the federal securities laws, including with respect to the Company’s expectations regarding its future success and performance including expectations with respect to its R&D; achieving the aim of the three R&D projects being pursued under the definitive agreement; the promise quantum computers have to dramatically transform critical areas including cryptography, chemistry, materials science, mathematical optimization, and AI/machine learning; the timeline for building quantum systems at scale and reducing their costs; and the Company’s ability to receive funding amounts as contemplated by the definitive agreement, including the timeline for such funding. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: the Company’s issuance of securities to the Department pursuant to the definitive agreement (including dilution to existing stockholders); the Company’s ability to achieve milestones, technological advancements, including with respect to its technology roadmap; Company’s ability to deliver products to customers in time or at all, including actions by customers, such as controls over their facilities and cancelling orders; the ability of the Company to obtain government contracts successfully and in a timely manner and the availability of government funding; the potential of quantum computing; the success of the Company’s partnerships and collaborations; the Company’s ability to accelerate its development of multiple generations of quantum processors; the outcome of any legal proceedings that may be instituted against the Company or others; the ability to maintain relationships with customers and suppliers and attract and retain management and key employees; costs related to operating as a public company; changes in applicable laws or regulations; the possibility that the Company may be adversely affected by other economic, business, or competitive factors; the Company’s estimates of expenses and profitability; the evolution of the markets in which the Company competes; the ability of the Company to implement its strategic initiatives and expansion plans; the expected use of proceeds from the Company’s past and future financings or other capital; the sufficiency of the Company’s cash resources; unfavorable conditions in the Company’s industry, the global economy or global supply chain, including rising inflation and interest rates, deteriorating international trade relations, political turmoil, natural catastrophes, military conflicts, and terrorist attacks; and other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 and other documents filed by the Company from time to time with the Securities and Exchange Commission. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and does not intend to update or revise these forward-looking statements other than as required by applicable law. The Company does not give any assurance that it will achieve its expectations.

While quantum computing doesn't yet have widespread practical applications, the technologies involved with it are improving. Artificial intelligence (AI) is widely believed to help accelerate quantum computing's applications, providing even more fuel to this tech fire.

The result is that many pure-play quantum computing stocks, including Rigetti Computing (RGTI +0.13%), have seen their share prices surge over the past three years, with Rigetti's rising 718%.

So, where will the company be in three more years, and can it replicate its past share price success? While I think Rigetti will likely expand its quantum computing sales and gain more customers, recreating its past returns will be very difficult. Here's why.

Image source: Getty Images.

Where Rigetti could be in three years While Rigetti's revenue is increasing and it's gaining some commercial customers, the company still needs to achieve more technological advancements before it sees meaningful sales. CEO Subodh Kulkarni said recently that "commercial revenue remains early" and that, "We remain focused on a clear sequence designed to position Rigetti to reach quantum advantage in roughly three years."

That's an important timeline for Rigetti because commercial sales will likely remain limited before then, and it helps put the company's current revenue into perspective. Sales rose by 185% in the second quarter, but that impressive jump still resulted in just over $5.1 million in revenue.

That's hardly an impressive figure, and it shows why Rigetti's management has tried to temper expectations.

But Rigetti is making progress with its quantum computing technologies, and in three years, it will likely have more customers and contracts than it does now. For example, the company said it expanded its collaboration with Hewlett Packard and the Pittsburgh Supercomputing Center to develop a hybrid quantum-classical supercomputer.

Rigetti also recently signed a letter of intent with the U.S. Department of Commerce for up to $100 million in funding over the next three years.

What's more, Rigetti has no debt and $541 million in cash and cash equivalents to keep investing in advancing its quantum computing technology.

Based on its current deals, rising sales, and the company's own estimates that more commercial sales are likely over the next three years, Rigetti appears to be on the right path.

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Rigetti stock likely can't replicate past three-year success While Rigetti's shares have soared more than 700% over the past three years, it's highly doubtful it can sustain that momentum.

Not only is it extremely rare for stocks to continue rising at such an explosive rate, but much of the investing momentum that helped drive Rigetti's shares higher has shifted to AI stocks.

Investors have realized that they can achieve very impressive returns on artificial intelligence stocks while enjoying the stability of owning a profitable company. Rigetti and its peers can't compete with that, and many investors have shifted from riskier quantum computing stocks to AI.

And with the AI boom still well underway -- and global AI infrastructure spending estimated to surpass $1 trillion next year -- it's likely that AI companies will continue to attract more investor attention as they reap the financial rewards.

Investors are hopeful that quantum stocks could be the next thing to soar after AI stocks.

*Stock prices used were the afternoon prices of Sept. 2, 2026. The video was published on Sept. 4, 2026.

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Rigetti Computing (RGTI +2.05%) is gaining strategic validation from government support and paying hardware customers, but the shareholder equation remains unsettled. The upside could grow substantially if those early signals become repeatable demand, provided capital requirements and dilution do not absorb too much of the value created.

Stock prices used were the market prices of Aug. 24, 2026. The video was published on Sept. 2, 2026.

Rick Orford has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Key Takeaways IonQ's Q2 revenue surged 287% to $80.1 million, marking its fifth straight record quarter.Rigetti's revenues rose 185% to $5.1 million as it advanced Cepheus-1 and its 1,000-qubit roadmap.IonQ raised 2026 revenue guidance to $280-$290 million while expanding its full-stack strategy. Quantum computing remains one of Wall Street's highest-risk, highest-reward themes, and the latest earnings season gave investors a fresh reason to compare two of the sector's biggest names. While Rigetti Computing (RGTI - Free Report) and IonQ (IONQ - Free Report) are pursuing different technology road maps, both used their second-quarter 2026 updates to showcase accelerating commercial traction and ambitious scaling plans.

IONQ delivered the bigger financial headline. Revenues surged 287% year over year to $80.1 million, marking its fifth straight record quarter, while management raised full-year revenue guidance to $280-$290 million. The company also strengthened its vertically integrated strategy through the SkyWater acquisition and highlighted progress toward semiconductor-based 256-qubit systems.

Rigetti's numbers were smaller, with revenues climbing 185% to $5.1 million, but its quarter centered on execution. The company advanced its 108-qubit Cepheus-1 platform, reiterated its chiplet-based roadmap toward 1,000 qubits and secured a Department of Commerce letter of intent for up to $100 million in potential CHIPS Act funding.

Investors have rewarded the stronger commercial momentum. Over the past month, IONQ and RGTI’s shares have gained 14.3% and 4.6%, respectively, reflecting greater confidence in IonQ's near-term execution. Still, Rigetti's government backing, modular architecture and hybrid computing partnerships suggest this race is about more than today's revenue figures.

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Let's get into more detail.

Rigetti's Growth CatalystsRigetti's second quarter reinforced its execution-focused investment case as revenue rose 185% year over year to $5.1 million, driven by on-premises Novera QPU sales, while gross margin expanded to 43% from 31% a year ago. The company also advanced its 108-qubit Cepheus-1 platform, reaffirmed its chiplet-based roadmap toward 1,000 qubits, secured a U.S. Department of Commerce letter of intent for up to $100 million in potential CHIPS Act funding and maintained a strong balance sheet with $541.3 million in cash and investments and no debt.

What's Holding Rigetti BackRigetti's biggest challenge remains translating technical progress into sustained commercial scale. Despite strong revenue growth, quarterly sales remain modest at $5.1 million, while operating expenses increased to $30.3 million as the company continued investing heavily in R&D, fabrication, refrigeration infrastructure and chip development. The company also needs to deliver meaningful improvements in Cepheus-1's gate fidelity and coherence times while executing on its ambitious 1,000-qubit roadmap, with the proposed CHIPS Act funding still awaiting a definitive agreement.

IonQ's Growth DriversIonQ strengthened its leadership position in the second quarter as revenue surged 287% year over year to $80.1 million, while organic revenue climbed 132%. The company continued expanding its commercial footprint, with 60% of revenues coming from commercial customers, 50% from international markets and 25% from multiproduct sales, while remaining performance obligations jumped to $485 million. IonQ also raised its 2026 revenue guidance to $280-$290 million and reinforced its full-stack strategy through the SkyWater acquisition and growing exposure across quantum computing, networking, security and defense.

What Could Slow IonQ's MomentumIonQ's rapid expansion continues to come with elevated costs and execution demands. The company posted an adjusted EBITDA loss of $120.3 million during the quarter, while SkyWater-related investments increased near-term spending as it accelerated product development and supply chain integration. Although the $1.8 billion SkyWater acquisition strengthens IonQ's long-term manufacturing strategy, it also raises the complexity of integrating operations while delivering on an ambitious roadmap spanning semiconductor-based quantum hardware, networking and security solutions.

2026 Estimates: RGTI Vs. IONQFor the full year, the Zacks Consensus Estimate for RGTI’s bottom line is pegged at a loss of 19 cents per share, implying a 70.3% improvement over the 2025 reported figure.

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The Zacks Consensus Estimate for IONQ’S 2026 bottom line is pegged at a loss of $1.19 per share, implying 34.6% growth over the 2025 reported loss.

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Bullish Price Target for RGTI over IONQBased on short-term price targets offered by 12 analysts, the average price target for IonQ represents an increase of 55.1% from the last closing price of $44.86.

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Based on short-term price targets offered by 11 analysts, the average price target for RGTI represents an increase of 64.99% from the last closing price of $17.91.

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Final Take: RGTI or IONQ?IonQ appears to have won the second-quarter earnings battle with far stronger revenue growth, higher commercial traction and a raised 2026 outlook, while Rigetti's update leaned more on technical milestones and long-term execution. However, neither stock currently carries a favorable Zacks rating. IonQ carries a Zacks Rank #4 (Sell), while Rigetti carries a Zacks Rank #5 (Strong Sell), suggesting weaker near-term expectations for both. Given IonQ's stronger operating momentum but elevated spending and integration risks, and Rigetti's earlier-stage commercial profile, investors may prefer to stay on the sidelines until fundamentals improve and their Zacks ratings turn more favorable.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.