Shares of Rigetti Computing (RGTI -0.45%) fell 22.6% last month, according to data provided by S&P Global Market Intelligence, as investors grew impatient with unprofitable companies.
Investors rotated out of many AI stocks as skepticism spread that all the money being spent in the tech sector will eventually pay off, and some of that skepticism seems to have spread to quantum computing stocks as well.
Here's what happened with Rigetti in July and why the stock will likely remain volatile.
Image source: Getty Images.
No profits and an expensive share price
Technology investors scrutinized their investments last month, and many trimmed their positions as they worried that all the money companies are spending on artificial intelligence, data centers, and quantum computing will prove worthwhile.
For example, semiconductor stocks were especially shunned last month, with 20 leading semiconductor companies losing more than $1 trillion in cumulative market cap.
While Rigetti isn't an AI company, it is spending heavily to grow its business. The company's research and development costs were nearly $41 million in the first half of this year, contributing to an operating loss of $54 million.
Meanwhile, Rigetti's revenue was just $9.5 million in the first six months of 2026.
Rigetti's shares are also very expensive, with the company's stock having a price-to-sales (P/S) ratio of 444. That's far higher than the average P/S ratio of about 8 for the technology sector.
With shares trading at such a high premium and the company spending heavily without any profits, some Rigetti shareholders likely viewed the stock as too risky to hold onto.
NASDAQ: RGTI
Key Data Points
Rigetti regained some ground on soaring second-quarter revenue
Rigetti's revenue spiked 185% in the second quarter (which ended June 30) to $5.14 million, which just outpaced Wall Street's consensus estimate of $5.09 million.
Investors were happy with the results, which were released on Aug. 6, and the stock is up about 4% since then.
The company also has $541.3 million in cash, cash equivalents, and investments, which goes a long way to Rigetti continuing to invest in its quantum computing technologies. What's more, Rigetti has no debt.
But none of the above erase the fact that Rigetti is still spending heavily, is unprofitable, and has a very pricey stock. This means that current shareholders will have to continue to ride out some intense volatility with Rigetti's stock, without any guarantees of eventual success.
Potential investors should proceed with caution and understand that they're paying a very high premium for a speculative stock.
