Rigetti Computing and the Industry of Quantum Computing

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What is Quantum Computing?

Quantum computing is a revolutionary type of computing that uses the principles of quantum physics to process information in fundamentally different ways from traditional computers. While conventional computers store data as bits (either 0 or 1), quantum computers use qubits, which can exist as 0, 1, or both at the same time—a property called superposition. This, combined with another quantum property known as entanglement, allows quantum computers to perform certain calculations at exponentially faster speeds than classical machines. In practical terms, this could enable breakthroughs in areas like cryptography, drug discovery, and supply chain optimization.

For business leaders, the promise of quantum computing lies in its potential to solve problems that are currently intractable, such as simulating complex financial systems or optimizing massive logistics networks in real time. While the technology is still in its early stages and not ready for widespread commercial use, major tech companies and startups alike are investing heavily in its development. As the ecosystem matures, businesses that understand and prepare for quantum’s disruptive potential could gain a significant competitive edge.

Why Rigetti Computing is a major player we are watching

Rigetti Computing is considered a major player in the quantum computing industry due to its pioneering approach to full-stack quantum computing, its early entry into the field, and its development of proprietary hardware and software platforms. Founded in 2013 by former IBM quantum researcher Chad Rigetti, the company made itself stand out by designing and building its own superconducting quantum processors in house, which is critical for optimizing performance and innovation.

Another key reason Rigetti stands out is its focus on cloud-based quantum access and hybrid computing. Its platform, Forest, and later Quantum Cloud Services, allows researchers and enterprises to run quantum algorithms in combination with classical computing resources. This hybrid approach makes Rigetti’s systems more practical and accessible for real world applications today. Despite being smaller than giants like IBM or Google, Rigetti has made significant strides in scaling up its qubit systems and partnering with government and enterprise clients—securing contracts with the U.S. Department of Energy and DARPA and going public via a SPAC in 2022. These moves have cemented its role as a major player in the industry.

Behind the numbers

Rigetti’s share price currently sits around $15.76, reflecting a strong short‑term rally driven largely by investor excitement about quantum technology and its partnerships. The company shows a negative P/E ratio of roughly –14×, indicating that it remains unprofitable on an operational basis. In the trailing twelve months, Rigetti generated only $10.8 m in revenue and posted a net loss of about $201 m.

In the most recent quarter (Q1 2025), revenue dropped to $1.5 m, a 52% year over year decline, while operating expenses rose to $22.1 m, resulting in an operating loss of $21.6 m. The company did report net income of $42.6 m, but that was entirely due to a $62 m non‑cash accounting gain tied to derivative and earn‑out liabilities, not underlying business profitability. Although it maintains a healthy cash and investment reserve of around $238 m, Rigetti continues burning cash while seeking meaningful commercial traction.

Our Thesis

When it comes to our overall thesis on Rigetti Computing, we want to make it very clear that this is by no means an underpriced stock in terms of the current outlook based on unprofitability, the burning of cash, and the lack of recent industry deals. While we always love to have core holdings in stocks like Google and Apple, we have realized with this rally that sometimes technical of a company may not be as strong as great media attention and the belief of an industry. Just Monday we saw Palantir, a company that reported a double beat on earnings with a PE Ratio of 686 continue to soar to new highs, bringing its year-to-date total to around a 109% gain. The AI boom is continuing to grow, and we may only be at the beginning, and while we do believe that this AI rally will continue, it’s always a good idea to try to beat the major industrial leaders to the next big industry (although most likely not as large as AI) with a small portion of your portfolio.

We believe that the next few years will be crucial for the adoption of quantum computing, which will be led by positive news regarding progress from the major players as well as how AI and Quantum computing could live simultaneously and work in unison. Where we think the key driver in this industry’s ability to catch wind and gain traction will come from is quantum computing's ability to perform complex calculations, which gives it certain speed and scale advantages for training machine learning and AI algorithms. Because of this, quantum computing excels at anomaly detection, which is crucial for efficient AI and machine learning processing. "There are certain problems in optimization and AI/ML, where classical computing algorithms look at data and see randomness while quantum algorithms can find patterns in what looks like random noise," said Scott Crowder, vice president of quantum adoption at IBM.

While we do not believe that quantum computing should make up a large portion of anyone’s portfolio, we do hold a small position in the stock and will continue to trade around any positive news throughout the sector. During times of massive stock market gains, sometimes it is important to diversify out of the major current winners and look ahead to what could be in the future. That will be our common theme in weeks to come.

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