Last October, Rigetti Computing (RGTI -4.71%) was priced near $56. Today it's around $14.
Is there more pain ahead for shareholders, or are the hard times over? Let's game out three scenarios to get a better idea about what's coming next for Rigetti's stock.
Image source: Getty Images.
The base case is a milestone-by-milestone grind forward
The most likely outcome for Rigetti over the next 18 months or so is that it will follow the same script as in recent quarters.
That means it'll likely be delivering its milestones mostly on time with occasional slippage, and getting federal money tied to its research and development (R&D) checkpoints, and that its revenue will continue to be minuscule next to its spending. Three numbers tell the whole story about what to expect: In the first quarter, it brought in just $4.4 million of revenue, while spending $19.9 million on R&D, and with $569 million of cash and short-term investments on hand.
One significant catalyst on the map is the plan to deliver a U.K.-based 1,000+ qubit system in three to four years, but there could also be a few other major catalysts in the meantime.
NASDAQ: RGTI
Key Data Points
For instance, Rigetti and the U.S. Department of Commerce signed a letter of intent in May that could deliver up to $100 million of government funding over the coming three years, with the government also planning to take an equity stake. The bigger point is that Rigetti currently has plenty of federal validation, cash, and, in all probability, upcoming dilution of its shares -- all of which is very familiar territory across quantum computing stocks.
The other possibilities diverge sharply
In a bullish scenario, Rigetti's next qubit milestone is met as planned, and the $8.4 million contract with India's Centre for Development of Advanced Computing is delivered in the second half of 2026. Its cloud service on Azure grows into a durable stream of recurring revenue rather than being essentially a bill for a tech demo or pilot program. That'd mean the company would generate a handful of positive headlines while demonstrating real technical competence that actual customers find useful. The stock might take a while to respond to the progress, but eventually, it will rise.
The bear case is an inversion of the bull case, but it's moderately less likely than the base or bull cases.
It calls for the next milestone payments not being reached, or being reached very late -- like the delay with the launch of its flagship 108-qubit machine -- while government money is allocated elsewhere, all amid a languishing stock price that gets pummeled by new share issuance to shore up cash reserves.
This is all to say that Rigetti's stock probably isn't going to be one with a strong financial fundamentals narrative anytime soon. So keep an eye on its progress toward catalysts and with securing new funding and collaborations, as those will be the main drivers for the stock for at least the next couple of years.
