Quantum computing is rapidly emerging as the next technological gold rush, and investors are eagerly scanning the horizon for the next seismic shift in this space. Among the frontrunners, Rigetti Computing (NASDAQ: RGTI) is making headlines with its impressive advancements in quantum processing power, setting the stage for a potential revolution in computing.
Quantum Computing’s Breakthrough Moment
Quantum computing promises an era of unparalleled processing power, and Rigetti is positioning itself at the forefront of this technological revolution. With an outstanding 99.5% fidelity achieved by the end of 2024, Rigetti is inching closer to the coveted milestone of quantum advantage—a tipping point where quantum computers outperform classical counterparts in meaningful applications. The company is targeting this achievement within the next three years and expects commercial adoption to follow within five.
DARPA Contract: A Potential Game-Changer for Rigetti
One of the most anticipated catalysts for Rigetti is the upcoming Defense Advanced Research Projects Agency (DARPA) Quantum Benchmarking contract awards, expected in February 2025. With a projected $300 million valuation over seven years, this contract could provide crucial funding and validation for Rigetti’s high-fidelity, error-corrected qubit systems. Industry analysts believe Rigetti is well-positioned to secure a portion of this lucrative federal contract, further solidifying its status as a leader in the quantum space.
Explosive Growth in Rigetti’s Stock Performance
Investors have taken notice of Rigetti’s rapid advancements, with its stock delivering eye-popping returns over the past year.
- 52-week surge: 595%, vastly outperforming the S&P 500’s 23% gain.
- Six-month rally: 1,040%, showcasing unprecedented momentum.
- Market Cap: Approximately $2.2 billion, reflecting strong investor confidence.
However, this meteoric rise comes at a hefty price. Rigetti currently trades at a staggering 280.68x forward sales, compared to the sector median of 3.27x, demonstrating the market’s immense belief in the company’s future potential.
Rigetti’s Q3 2024 Performance: A Mixed Bag
Despite the excitement, Rigetti’s third-quarter 2024 results showcased some financial hurdles:
- Revenue: $2.4 million (down 23% YoY), missing estimates of $3.4 million.
- Operating expenses: $18.6 million.
- Net loss: $14.8 million.
- Loss per share: $0.08 (vs. $0.17 per share YoY).
- Cash position: A solid $92.6 million in cash, cash equivalents, and securities as of Sept. 30, 2024.
Despite revenue setbacks, Rigetti’s financial standing remains strong, and analysts expect losses to narrow by 35.9% in fiscal 2024 and 17.8% in fiscal 2025.
Technical Roadmap: Scaling Qubits to Unleash True Quantum Power
Rigetti’s future growth hinges on its ability to scale quantum processors while maintaining high fidelity. In 2025, the company plans to introduce a new modular system architecture, featuring:
- 36-qubit system by mid-2025.
- 100+ qubit system by year-end.
- Targeting 99.5% median 2-qubit fidelity.
- Development of the 336-qubit Lyra system in the following years.
If successful, these advancements will further cement Rigetti’s role as a quantum computing powerhouse and a key player in the next generation of computing technologies.
With multiple tailwinds, a high-stakes government contract on the horizon, and a relentless pursuit of quantum supremacy, Rigetti Computing remains one of the most exciting and closely-watched companies in the tech investment landscape.
