What happened
Shares of Rigetti Computing (RGTI 8.55%) were up 43.9% as of 10:30 a.m ET Friday, according to data provided by S&P Global Market Intelligence, after the quantum integrated circuits provider announced strong second-quarter 2023 results.
Rigetti's quarterly revenue climbed 55.9% year over year, to $3.3 million, translating to a net loss of just under $17 million, or $0.13 per share. Analysts on average were expecting a net loss of $0.09 per share, but on lower revenue of $2.75 million.
So what
Rigetti Computing's pop today comes as fellow quantum computing specialist IonQ (IONQ 9.66%) enjoys a similar rally on a technically mixed report; IonQ posted its own wider-than-expected quarterly loss while beating estimates on revenue and raising its bookings outlook late yesterday. It's not terribly surprising to see yet-to-be-profitable quantum computing stocks like Rigetti Computing and IonQ generating wider losses as they grow revenue in their earliest stages -- particularly as they've yet to generate meaningful operating leverage at scale.
Rather, it's more exciting for investors in these quantum names to see encouraging progress for the underlying businesses. Indeed, Rigetti Computing recently completed its first quantum processing unit (QPU) sale to a national lab, saying it "delivered a 9-qubit QPU and associated hardware to the lab, which features tunable couplers that can perform entangling two-qubit gate operations."
In addition, Rigetti signed a collaboration agreement with ADIA Lab during the quarter to design, build, execute, and optimize a quantum computing solution to address the probability distribution classification problem, which the company states "has many direct applications to practical use cases in the investment industry."
Now what
Rigetti confirmed that its longtime partner, Riverlane, recently became its first external partner to begin using its Ankaa-1 system to work on improving error correction techniques on its latest architecture.
"We also look forward to making Ankaa-2, our most innovative system to date, available to the general public in Q4 of this year," added Rigetti CEO Dr. Subodh Kulkarni.
In the end, these are still early times for the quantum industry. And while quantum computing systems boast immense potential, in order to truly realize that potential -- and to, in turn, scale and monetize its business -- Rigetti knows it needs to provide practical solutions to broad-based problems across multiple industries. This quarter was a solid step in the right direction to that end, and Rigetti Computing stock is understandably rallying in response.