Shares of Rigetti Computing (RGTI) gained in early Wednesday morning after B. Riley analyst Craig Ellis raised his price target to a street-high of $19, up from $15. The five-star analyst maintained a Buy rating, citing technical progress and strategic partnerships that could strengthen its position in the quantum computing industry.
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The upward revision comes as Ellis updated his valuation model, raising the long-term serviceable addressable market (SAM) multiple from 0.24x to 0.3x. This reflects the analyst’s optimism about Rigetti’s potential to scale and its commercialization path.
Key reasons supporting this move are Rigetti’s aim to triple its module capacity to over 100 qubits by the end of 2025. Also, the analyst believes that strategic collaborations are helping to speed up development. Further, RGTI is working with U.K.-based Riverlane to improve quantum error correction, a key hurdle for practical quantum computing.
Revenue Outlook and Government Support
Looking ahead, Ellis projects Q2 revenue of $1.9 million and an EPS loss of $0.06. About 94% of revenue is expected from collaborative research and services, with only 6% from quantum processing unit (QPU) access. RGTI is scheduled to report Q2 results on August 12.
He also noted Rigetti’s exposure to U.S. government quantum initiatives. While near-term revenue recognition may be impacted by the expiration of the National Quantum Initiative Act, Ellis expects renewed funding through proposed legislation such as the $2.7 billion National Quantum Reauthorization Act and the $2.5 billion DOE Quantum Leadership Act.
Is RGTI a Good Stock to Buy?
Turning to Wall Street, RGTI stock has a Strong Buy consensus rating based on seven Buys assigned in the last three months. The average Rigetti share price target is $15.40, which implies a downside of 1.79% from current levels.
