Rigetti Computing (RGTI +2.65%) has built some of the most capable quantum computers on the market today. The company is unique because it does almost everything in-house, from fabricating its own quantum chips to developing its own quantum programming language, which means it can innovate faster than most of its competitors.
However, Rigetti stock is currently down 74% from its all-time high from last October. Unfortunately, while quantum computers hold a lot of promise in areas like science and cryptography, even the best systems still make too many errors to solve real-world problems. As a result, Rigetti's revenue hasn't grown as quickly as investors expected, which is why its stock is under so much pressure.
I think there might be even more downside ahead for this stock, because it remains incredibly expensive by one widely used valuation metric. Here's where I predict it will be one year from now.
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Commercialization is a long and tricky journey
Even the most powerful classical computers can only perform a limited number of operations at once. That's why developing advanced technologies like artificial intelligence (AI) requires enormous data centers filled with thousands of individual chips. Quantum computers, on the other hand, use a concept called superposition to simulate several solutions to a problem at the same time, making them better suited for data-intensive workloads.
Superposition is when a quantum bit (qubit) assumes a state of both 0 and 1 simultaneously, whereas classical computing bits are always in a state of either 0 or 1. When a quantum computer has multiple qubits in superposition, its ability to process more data than a classical computer grows exponentially.
But qubits are extremely unstable, so in most cases they can only maintain superposition for a matter of microseconds, and they are also prone to errors. Gate fidelity measures the accuracy of each quantum operation, with a higher reading translating to fewer errors.
Rigetti recently launched the industry's largest multichip quantum computer -- called Cepheus-1-108Q -- which boasts 108 qubits, tripling the scale of the company's previous Cepheus-1-36Q system. It has achieved a gate fidelity of 99.9% which sounds excellent, but it means the computer will still make one error in every 1,000 operations.
In most cases, that simply isn't good enough when trying to solve complex problems, so the company still has a lot of work to do.
Rigetti's revenue declined last year
Rigetti sells quantum computers directly to other companies, but it also leases quantum computing capacity to developers through its own cloud platform, and through third parties like Amazon Braket, which is the quantum division of Amazon Web Services.
Overall, Rigetti generated just $7.1 million in revenue during 2025, which was a 34% drop from the previous year. That isn't a lot of income for a company valued at $4.7 billion, but on a positive note, Wall Street expects Rigetti's revenue to more than triple to $22.5 million during 2026 (according to Yahoo! Finance). That still leaves the company with an extremely expensive valuation, but I'll explore this further in a moment.
NASDAQ: RGTI
Key Data Points
Besides Rigetti's lumpy revenue, investors are also concerned about its steep losses. The company had $86.7 million in total operating expenses during 2025, with $61.3 million taken up by research and development alone. After factoring in non-operating liabilities, Rigetti's generally accepted accounting principles (GAAP) net loss came in at a whopping $216.2 million.
Large losses make investors uneasy, because it means the company will eventually need a cash infusion to fund its operations. That could mean debt financing (which comes with interest costs), or it could mean raising money from investors, which will dilute every existing shareholder and impact their long-term returns.
Rigetti ended 2025 with $589.8 million in cash and equivalents on its balance sheet, so fortunately it has plenty of time to either find more revenue or cut costs before it has to seek new sources of funding.
Rigetti stock could fall by over 50% in the next 12 months
Based on Rigetti's 2025 revenue of $7.1 million, and its market capitalization of $4.7 billion, its stock trades at a ludicrous price-to-sales (P/S) ratio of over 600. Even if we value the stock using Wall Street's 2026 revenue estimate of $22.5 million, its forward P/S ratio is still an eye-watering 210.
RGTI PS Ratio data by YCharts
For some perspective, Nvidia trades at a P/S ratio of 21.1, and it's one of the highest-quality companies in the entire world. Alphabet, which is developing quantum computers of its own, is even cheaper than Nvidia with a P/S ratio of just 9.7.
Mathematically speaking, Rigetti stock would have to plummet by 96% from here just to match Nvidia's P/S ratio. That would take the stock from its current price of $14.31 down to just $0.57.
I'm not suggesting that will happen, because there is still plenty of hype surrounding the quantum industry, and many investors truly believe Rigetti can capitalize its leadership position in the long run. But given its valuation, I think a decline of at least 50% would be justified over the next 12 months, which would take the stock to around $7 (or less).
