Rigetti Computing (NASDAQ: RGTI) has been making waves in the quantum computing industry, with its stock appreciating 14.3% since reporting its Q4 2024 earnings on March 5. Despite missing revenue estimates, the company’s advancements in quantum technology and strategic collaborations have kept investors intrigued.
Revenue Decline Amid Market Challenges
Rigetti Computing reported Q4 2024 revenues of $2.3 million, reflecting a 32.6% year-over-year decline and missing the Zacks Consensus Estimate by 5.25%. This drop was attributed to macroeconomic uncertainties and fierce competition in the rapidly evolving quantum computing landscape.
However, the company’s expanding customer base and technological improvements signal long-term growth potential. Rigetti’s progress in quantum hardware and AI-driven calibration techniques underscores its commitment to staying ahead in this competitive sector.
Ankaa-3 Quantum System: A Game-Changer?
A major highlight for Rigetti in Q4 2024 was the launch of the Ankaa-3, an 84-qubit quantum system featuring a significant hardware redesign. This innovation achieved remarkable performance milestones, including a 99.0% median fidelity in two-qubit gate operations. The reduction in error rates further strengthens Rigetti’s position in the quantum ecosystem.
Additionally, the company collaborated with Quantum Elements and Qruise to automate quantum processing unit (QPU) calibration using AI, an innovation that enhances system efficiency and solidifies Rigetti’s industry leadership.
Strategic Sales & Growing Global Presence
Rigetti successfully sold its Novera QPU to Montana State University (MSU) and the UK government in Q4. MSU aims to utilize the QPU for quantum research and workforce development, while the UK government’s purchase reinforces Rigetti’s influence in the international quantum market.
With the global quantum computing market projected to grow at a CAGR of 20.5% from 2025 to 2030 (per Grand View Research), Rigetti is well-positioned to capitalize on industry expansion.
$100M Partnership with Quanta Computer
In February 2025, Rigetti announced a strategic collaboration with Quanta Computer, a significant player in the tech industry. Both companies will invest over $100 million each over five years to accelerate the development and commercialization of superconducting quantum computing technology.
As part of this partnership, Quanta will also invest $35 million in Rigetti through a share purchase, pending regulatory approval. With the quantum computing industry expected to reach $1-2 billion annually by 2030, this deal could be a pivotal move for Rigetti’s growth.
Upward Trend in Earnings Estimates
Despite near-term challenges, Rigetti’s long-term outlook remains promising. The Zacks Consensus Estimate for 2025 revenue is pegged at $14.50 million, indicating a 34.38% year-over-year increase. Additionally, the estimated loss per share has improved by 14.29% over the past 30 days, reflecting increased investor confidence.
RGTI Stock Outperforms Tech Sector Peers
In the past three months, RGTI stock has surged 9.6%, outperforming the broader Zacks Computer & Technology sector and several industry peers, including:
- Affirm (AFRM): Down 33.2%
- Atlassian (TEAM): Down 20.4%
- nCino (NCNO): Down 18.2%
- Zacks Internet – Software Industry: Down 5.8%
The broader technology sector also declined 8.9% in the same timeframe, further highlighting Rigetti’s relative strength.
Valuation Concerns: Is RGTI Overpriced?
While Rigetti’s technological advancements and partnerships are impressive, its current valuation raises concerns. The stock carries a Value Score of F, and its forward 12-month Price/Sales ratio stands at 95.3X, significantly higher than the sector’s 5.97X. This suggests that RGTI is trading at a premium compared to its peers, which could lead to volatility in the short term.
Final Thoughts
Rigetti Computing’s innovations in quantum hardware, strategic collaborations, and growing global presence make it a compelling player in the quantum computing race. However, valuation concerns and revenue headwinds remain key factors for investors to consider. As the industry evolves, RGTI’s ability to maintain its competitive edge will determine whether it can sustain its recent stock gains or face potential pullbacks.
