Rigetti Shares Tumble Following Third-Quarter Results and Program Setback

Quantum computing represents a frontier technology with transformative potential, but the journey toward commercialization remains challenging and capital-intensive. Rigetti Computing (NASDAQ: RGTI) experienced this reality firsthand last week, as its stock price declined significantly despite surpassing earnings expectations. The shares fell more than 5 percent, a drop triggered by disappointing revenue figures and a major strategic setback involving a key government initiative.

On November 10, Rigetti announced its financial results for the third quarter of 2025. The company reported a loss per share of $0.03, which was better than the consensus analyst forecast of a $0.05 loss. This positive development, however, was quickly overshadowed by an 18.1 percent year-over-year decline in revenue, which fell to $1.95 million. This figure fell short of the anticipated $2.17 million, primarily due to lower income from collaborative research agreements.

A more significant blow was revealed during the earnings call: Rigetti failed to secure advancement to Phase B of the DARPA Quantum Benchmarking Program. This prestigious government initiative aims to identify quantum systems capable of outperforming classical computers—a critical validation and milestone for any company in this sector. While Rigetti management indicated they received "constructive feedback" and are maintaining dialogue with the agency, the exclusion introduces considerable uncertainty regarding near-term government funding and technological recognition.

Institutional Investors Maintain Confidence

Despite these recent challenges, ownership data reveals a contrasting narrative. Several major institutional asset managers, including Vanguard Group and Geode Capital Management, have recently increased their stakes in the quantum computing firm. In total, institutional investors control approximately 35.4 percent of the company's shares, suggesting that many professional, long-term-oriented market participants continue to believe in Rigetti's underlying potential.

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

This confidence is likely tied to the company's ambitious technology roadmap. Rigetti is targeting the delivery of a system boasting over 150 qubits by the end of 2026, with a plan to launch a processor exceeding 1,000 qubits by the end of 2027. The company's modular chiplet architecture is frequently cited as a promising approach to scaling quantum systems, though the path to achieving these goals is expected to be long, costly, and marked by volatility.

High Stakes in the Quantum Computing Arena

The recent events at Rigetti underscore a fundamental tension within the entire quantum computing industry. While the technology promises to unlock unprecedented computational power, its widespread commercial application remains a distant prospect. Rigetti continues to operate at a loss, with net margins deeply negative. Nevertheless, the consensus analyst rating for the stock remains "Moderate Buy," indicating that market experts see a plausible path to long-term success.

For investors, Rigetti shares represent a highly speculative asset. Anyone considering a position must be prepared for extreme price swings and possess the patience to wait potentially several years for the technological and commercial breakthroughs needed to justify the investment.