Rigetti Computing, Inc.

NASDAQ Capital Market
Back to all articles
Somewhat Bearish -45

Prediction: This Quantum Computing Stock Is Going to Plummet in the Second Half of 2026

🇺🇸 The U.S. government committed $100 million over three years to Rigetti Computing as part of a $2 billion national quantum initiative.

📈 RGTI stock rose 20% immediately following the announcement of the federal funding.

⚠️ Rigetti's flagship Cepheus-1-108Q system has 108 qubits but suffers from two-qubit gate fidelity of only 99.1%, causing nine errors per 1,000 operations.

📉 The company reported a GAAP net loss of $20.5 million in Q1 and a staggering $216 million loss for the full year 2025.

💰 Rigetti holds $569 million in cash but faces high operating expenses of $27.3 million in Q1, necessitating future capital raises that could dilute shareholders.

📊 Rigetti trades at a price-to-sales ratio of 663, vastly exceeding SpaceX's 137.8 and the Nasdaq-100's 6.9.

🔮 Analysts predict RGTI stock could plummet by 50% or more in the second half of 2026 due to its elevated valuation and inconsistent revenue trends.

🎯 Wall Street consensus estimates Rigetti's 2026 revenue at $23.6 million, a target failure of which could trigger further sharp declines.

🚀 The company operates its own fabrication facility and cloud platform but faces decades-long timelines before quantum systems become commercially viable for cryptography.

Bullish Signals
  • The U.S. government has pledged $100 million in funding over three years to support Rigetti's development.
  • Rigetti is a recognized leader in the quantum computing industry with proprietary hardware and software stacks.
  • The company operates its own fabrication facility, allowing it to bring new systems to market faster than competitors.
  • Revenue grew 198% year-over-year in Q1 to reach $4.4 million, indicating growing customer interest.
  • Rigetti has secured a significant $8.4 million order for its Cepheus-1-108Q system from India's Center for Development of Advanced Computing.
  • The company holds a strong balance sheet with $569 million in cash, equivalents, and short-term investments.
  • Rigetti has developed Quil, its own quantum programming language, and offers a cloud platform for renting capacity.
Risk Factors
  • Rigetti's stock trades at an eye-popping price-to-sales ratio of 663, which is nearly 10x higher than SpaceX and vastly above the Nasdaq-100 average.
  • The company recorded a massive $216 million net loss in 2025 and a $20.5 million loss in Q1 2026, indicating severe profitability challenges.
  • Revenue declined in 2025 despite recent growth, showing an inconsistent upward trend that contradicts the high valuation.
  • The flagship Cepheus-1-108Q system has a two-qubit gate fidelity of 99.1%, resulting in nine errors per 1,000 operations which limits real-world problem-solving capabilities.
  • Experts estimate it could take 20 to 40 years before quantum systems are accurate enough to disrupt critical industries like cryptography.
  • The company's operating expenses of $27.3 million in Q1 far exceed its revenue, suggesting the government funding will not sustain operations long-term without dilution.
  • Analysts predict a potential 50% or greater decline in stock price during the second half of 2026 if the company fails to meet revenue targets.
Full Analysis
The U.S. government announced a $100 million investment plan for Rigetti Computing (NASDAQ: RGTI) over the next three years as part of a broader $2 billion initiative to support nine quantum computing companies. Following this news, RGTI stock jumped 20%. However, The Motley Fool analyst warns that despite being an industry leader with its own fabrication facility and cloud platform, the company faces significant valuation risks. Rigetti's flagship Cepheus-1-108Q system features 108 qubits but suffers from high error rates in two-qubit operations (99.1% fidelity), making it currently impractical for solving complex real-world problems. While the company aims to upgrade fidelity this year, experts estimate it could take decades before quantum systems are accurate enough to disrupt fields like cryptography. Consequently, the technology remains in a long-term development phase with limited immediate commercial utility. Financially, Rigetti presents a stark contrast between soaring revenue growth and steep losses. While Q1 revenue surged 198% to $4.4 million, the company reported a GAAP net loss of $20.5 million for the quarter and a massive $216 million loss in 2025. With operating expenses at $27.3 million in Q1, the government's funding is unlikely to cover costs indefinitely, suggesting a probable capital raise that would dilute shareholders. The article highlights Rigetti's sky-high valuation as the primary driver for a predicted stock decline of 50% or more in the second half of 2026. Trading at a price-to-sales ratio of 663, RGTI is valued significantly higher than peers like SpaceX (P/S 137.8) and the Nasdaq-100 index (P/S 6.9). The analyst concludes that unless Rigetti hits Wall Street's consensus revenue target of $23.6 million for 2026, the stock faces substantial downside risk due to its lumpy growth and unsustainable burn rate relative to its market cap.