Rigetti Computing (RGTI) is a quantum chip and cloud firm that builds quantum systems for labs, firms, and state-backed clients. Its latest earnings call was upbeat, but it also showed why the stock is still a high-risk bet.
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Trade AMZN with leverageThe main point is clear. Rigetti is making real tech gains, yet it still needs to prove those gains can translate into large, steady sales. The firm said its 108-qubit Cepheus-1 system is now live across its own cloud, as well as AWS Braket (AMZN), Microsoft Azure Quantum (MSFT), and qBraid. That is a key step, since quantum firms are judged by what clients can use, not just by what they plan to build.
The company also gave fresh details on its chip speed and error rates. Its current system has a median two-qubit gate fidelity of about 99.1%, while the company aims to increase that to about 99.5% later this year. Over time, Rigetti is aiming for a roughly 1,000-qubit system with 99.9% fidelity. That goal is bold, but it gives the market a clear path to track.
Meanwhile, RGTI shares dropped 3.43% on Wednesday, closing at $18.42.
Strong Cash, But Sales Are Still Small
On the financial side, Rigetti posted Q1 sales of $4.4 million, up from $1.5 million a year ago. That is strong growth, but it comes from a very small base. As a result, the stock is still not a classic earnings story. It is more of a tech road map story, backed by a large cash pile.
That cash pile matters. Rigetti ended the quarter with about $569 million in cash, cash-like assets, and available-for-sale funds, with no debt. This gives the company room to fund its plan while the quantum market takes shape.
Still, there are clear risks. Operating costs were $27.3 million, and the firm posted an operating loss of $26 million. Also, sales can be lumpy, since some revenue depends on system orders, setup, and client sign-off. In addition, the company still has to improve coherence times, which are key to better chip quality at scale.
Overall, Rigetti’s call was a constructive one. The firm looks better placed than before, thanks to its 108-qubit launch, strong cash base, and clear fidelity targets. However, the stock is still best viewed as a speculative quantum name rather than a mature growth stock. The next big tests are simple: hit the 99.5% target, convert orders into sales, and show that demand is growing beyond research and state-backed clients.
Is RGTI a Good Stock to Buy?
Turning to the Street, Rigetti Computing has a Moderate Buy consensus, based on 11 analysts’ ratings. The average RGTI stock price target is $30, which implies a 62.91% upside from the current price.
