Rigetti Computing: A High-Stakes Valuation Amid Technical Ambition

Rigetti Computing shares enter the final trading days of 2025 caught between a recent sell-off and the towering expectations embedded in its market valuation. The stock's 8.7% decline on Friday effectively erased most of the prior week's gains, a move attributed to growing analyst skepticism regarding its revenue outlook and valuation metrics looking ahead to 2026.

Friday's weakness followed a surge of more than 9% on Christmas Eve. By the closing bell, the company's market capitalization stood at approximately $7.4 billion—a figure that is drawing increased scrutiny given the current scale of its financials.

The sell-off occurred on notably thin trading volume. Only around 28 million shares changed hands, roughly 60% below the stock's average daily volume of 69 million shares. Such periods of low liquidity can amplify price movements, which in this instance were decisively to the downside.

The downturn was fueled by several cautious analyst reports published late in the week. A primary focus was the stock's exceptionally high price-to-sales ratio, which some estimates placed above 1,000 at times. This has led to a growing consensus that the 2025 rally may have overshot the company's actual commercial progress.

Key financials highlight the tension between its promising narrative and present reality:
- Revenue for the first three quarters of 2025: $5.2 million
- Year-over-year change: –39%
- Two Novera quantum system orders received in late 2025
- Revenue recognition for these orders: Expected in the first half of 2026

Thus, the high hopes for future technology revenue are currently juxtaposed with declining sales and an ongoing cash burn.

Institutional Support Meets a Daunting Path to Profit

Despite the short-term price pressure, the backdrop presents a divided picture. On one side are skeptical market experts, while on the other is increasing commitment from major institutional asset managers. Recent disclosures show that firms including Vanguard and BlackRock expanded their positions during 2025. These purchases signal confidence in the long-term potential of Rigetti’s superconducting quantum architecture and its modular chip technology.

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

Nevertheless, the chasm between valuation and business scale remains striking. A multi-billion dollar market cap contrasts with annual revenue in the low single-digit millions. Compounding this is the substantial research and development expenditure required for its technology roadmap, which pushes any prospect of profitability far into the future. Consequently, the shares remain highly sensitive to shifts in market sentiment and changes in the interest rate environment.

Sector Volatility and a Pivotal Technical Catalyst

The stock's volatility is set against a nervous backdrop for quantum computing and high-risk tech equities as 2025 draws to a close. Friday's 8.7% drop fits a pattern of growing investor caution toward speculative assets during the year-end period.

Rigetti has experienced a turbulent year marked by several sharp rallies, such as around the general availability announcement for its 36-qubit multichip system earlier in the year. However, these phases driven by technological progress reports have been routinely followed by severe corrections.

While wide price swings are not unusual in the sector, they are more pronounced for Rigetti due to its significantly smaller revenue base compared to some competitors. The market is currently pricing in a scenario where only a handful of quantum hardware providers will capture the majority of the sector's value. Within this framework, Rigetti’s modular approach is viewed as particularly promising, but it carries commensurate risk.

All attention is now focused on a promised technical milestone. The company has projected it will make a system with over 100 qubits and a 0.5% error rate (99.5% fidelity) available by the end of 2025. Successful confirmation of this achievement could quickly offset the recent correction and bolster the arguments for its premium valuation. Any delay, however, would lend further support to skeptical voices at the start of the first quarter of 2026.

Analyst price targets remain widely dispersed, reflecting deep uncertainty about the pace and commercial translation of technological advancement. In the near term, continued heightened volatility—both in pre-market and regular session trading—is expected as the market continues to grapple with the gap between Rigetti's technological ambition and its current financial metrics.