Quantum Computing Stock Plunges Amid Analyst Downgrade Concerns

Shares of quantum computing firm Rigetti experienced a dramatic selloff on Tuesday, plummeting more than 10% in a single trading session following a revised assessment from financial analysts. The sharp decline came despite the contradictory nature of the analyst report that simultaneously lowered the investment rating while raising the price target substantially.

Financial services firm B. Riley sparked the market downturn by downgrading Rigetti from "Buy" to "Neutral" status. According to their research note, the primary concern centers around potential delays in U.S. government funding approvals. The analysts highlighted what they termed "significant near-term revenue risk" and expressed worries that the company's sales cycle could experience considerable extension.

In a seemingly contradictory move, B. Riley elevated their price target for Rigetti from $35 to $42 per share. This dual approach reflects the current market dichotomy: while quantum computing maintains substantial long-term growth prospects, short-term challenges including liquidity constraints and contract award delays present immediate concerns.

High-Flying Stock Faces Reality Check

The timing of this market correction proves particularly challenging for Rigetti investors. Before Tuesday's downturn, the company's stock had delivered an extraordinary performance throughout the year, skyrocketing by more than 156%. This explosive appreciation had generated increasing anxiety about potential overvaluation—concerns that now appear to be materializing.

Should investors sell immediately? Or is it worth buying Rigetti?

While broader market indices also declined on Tuesday—with the S&P 500 falling approximately 1.2% and the Nasdaq Composite dropping about 2%—Rigetti's double-digit percentage decline significantly outpaced the market, demonstrating heightened investor sensitivity toward highly-valued technology equities.

Upcoming Financial Report to Set Direction

Market attention now turns to November 10, 2025, when Rigetti is scheduled to release third-quarter financial results after market close. Investors await crucial information regarding several key areas: revenue trajectory, concrete progress on government contracts, and management's assessment of risks associated with potential funding delays.

Despite the recent setback, Wall Street analysts maintain a cautiously optimistic "Moderate Buy" consensus rating. The coming days will determine whether this confidence remains justified or if Rigetti shares will face continued pressure.