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4 days ago
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Rigetti vs. IBM: Which Quantum Computing Stock Has Better Prospects?
As quantum computing inches closer to practical, real-world applications, investors are turning their attention to the companies leading the charge in this transformative technology. Rigetti Computing RGTI and International Business Machines Corporation IBM are two prominent players in the quantum space, each with distinct approaches and advantages. Rigetti, a nimble startup, focuses on building cutting-edge quantum processors and scalable systems, while IBM leverages its decades-long expertise and vast resources to develop a comprehensive quantum ecosystem that integrates hardware, software, and cloud services. Both companies are rapidly expanding their quantum capabilities and securing partnerships with governments, research institutions, and enterprises eager to use quantum power. As the quantum computing market shifts from experimental research to commercial use, this faceoff compares Rigetti and IBM on technology, business models, and growth strategies, helping investors identify which stock offers better long-term upside in the emerging quantum era. Shares of Rigetti have plunged 8.2%, while IBM stock has gained 17.6% in the year-to-date period. Image Source: Zacks Investment Research From a valuation standpoint, IBM looks more attractive than RGTI. According to the price/book ratio, IBM's shares currently trade at 8.92, lower than 19.43 for Rigetti. Image Source: Zacks Investment Research Rigetti uses a modular quantum architecture that scales by linking smaller chips. Its latest Ankaa-3 system features 84 superconducting qubits with approximately 99.5% two-qubit gate fidelity, enabled by its proprietary ABAA process. Rigetti emphasizes AI-assisted calibration and error reduction to boost performance. It plans to launch a 36-qubit system in mid-2025 and exceed 100 qubits by year-end. Though innovative, its systems remain smaller in scale compared to industry leaders. IBM deploys a highly integrated quantum stack, led by its 133-qubit Heron processor, which improves error rates and reduces crosstalk over its Eagle predecessor. Its modular architecture supports interconnecting processors like the 1,121-qubit Condor, forming the backbone of Quantum System Two for scalable hybrid computing. With strong cloud integration, global infrastructure, and developer support via Qiskit, IBM remains a leader in practical, scalable quantum technology. Rigetti adopts a focused, hardware-first business model tailored to quantum computing, centered around its proprietary modular chip architecture and cloud-based Quantum Cloud Services. It monetizes through direct system access, strategic partnerships, and integration with platforms like Amazon Braket and Azure Quantum. Rigetti targets niche enterprise and research segments, offering flexible deployment and AI-assisted system calibration. In contrast, IBM leverages its vast resources to deliver a full-stack quantum computing model, combining hardware, software (Qiskit), and services under the IBM Quantum Platform. It commercializes through cloud access, consulting, and its 280+ member IBM Quantum Network, which includes Fortune 500 firms and academic institutions. With over $1 billion in cumulative quantum revenue and multi-billion-dollar R&D investments, IBM's business model emphasizes ecosystem dominance, global infrastructure, and long-term enterprise integration. Rigetti's growth strategy centers on scaling modular quantum systems, advancing hardware via ABAA fabrication and AI calibration, and targeting a 108-qubit system by the end of 2025 with halved error rates. It is expanding manufacturing through a $250M Quanta partnership and boosting cloud integration to widen access. While innovation-driven and agile, the strategy is limited by financial constraints and a smaller customer base. IBM's growth strategy focuses on quantum-centric supercomputing via a long-term roadmap, interconnecting modular chips like the 1,121-qubit Condor to achieve fault tolerance. It targets quantum advantage by 2026 through efforts like the '100×100 challenge' and Quantum System Two. Leveraging global infrastructure, enterprise partnerships, and strong R&D funding, IBM prioritizes scalability, reliability, and commercial adoption worldwide. The Zacks Consensus Estimate for RGTI's 2025 sales implies a year-over-year decline of 18.63%. For 2025, loss per share is projected to be 5 cents compared with 36 cents a year ago. The earnings estimates have been trending upward over the past 60 days. Image Source: Zacks Investment Research The Zacks Consensus Estimate for IBM's 2025 sales and earnings implies year-over-year growth of 5.5% and 6%, respectively. The earnings estimates have been trending upward over the past 60 days. Image Source: Zacks Investment Research Both Rigetti and IBM are advancing in the quantum computing space, but they differ significantly in scale, strategy, and market positioning. IBM holds a Zacks Rank #3 (Hold) with a strong Growth Score of 'A', reflecting solid potential driven by its expansive infrastructure, global partnerships, and ambitious quantum roadmap. Rigetti, on the other hand, carries a Zacks Rank #4 (Sell), indicating a challenging short-term prospect. However, its Growth score of 'B' reflects upside potential once the challenges subside. While Rigetti remains a compelling small-cap innovator with modular architecture and technical focus, IBM's full-stack capabilities and enterprise reach give it an edge for investors seeking more stability and long-term commercial traction in the quantum sector. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report International Business Machines Corporation (IBM) : Free Stock Analysis Report Rigetti Computing, Inc. (RGTI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
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4 days ago
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Rigetti vs. IBM: Which Quantum Computing Stock Has Better Prospects?
As quantum computing inches closer to practical, real-world applications, investors are turning their attention to the companies leading the charge in this transformative technology. Rigetti Computing RGTI and International Business Machines Corporation IBM are two prominent players in the quantum space, each with distinct approaches and advantages. Rigetti, a nimble startup, focuses on building cutting-edge quantum processors and scalable systems, while IBM leverages its decades-long expertise and vast resources to develop a comprehensive quantum ecosystem that integrates hardware, software, and cloud services. Both companies are rapidly expanding their quantum capabilities and securing partnerships with governments, research institutions, and enterprises eager to use quantum power. As the quantum computing market shifts from experimental research to commercial use, this faceoff compares Rigetti and IBM on technology, business models, and growth strategies, helping investors identify which stock offers better long-term upside in the emerging quantum era. Shares of Rigetti have plunged 8.2%, while IBM stock has gained 17.6% in the year-to-date period. Image Source: Zacks Investment Research From a valuation standpoint, IBM looks more attractive than RGTI. According to the price/book ratio, IBM's shares currently trade at 8.92, lower than 19.43 for Rigetti. Image Source: Zacks Investment Research Rigetti uses a modular quantum architecture that scales by linking smaller chips. Its latest Ankaa-3 system features 84 superconducting qubits with approximately 99.5% two-qubit gate fidelity, enabled by its proprietary ABAA process. Rigetti emphasizes AI-assisted calibration and error reduction to boost performance. It plans to launch a 36-qubit system in mid-2025 and exceed 100 qubits by year-end. Though innovative, its systems remain smaller in scale compared to industry leaders. IBM deploys a highly integrated quantum stack, led by its 133-qubit Heron processor, which improves error rates and reduces crosstalk over its Eagle predecessor. Its modular architecture supports interconnecting processors like the 1,121-qubit Condor, forming the backbone of Quantum System Two for scalable hybrid computing. With strong cloud integration, global infrastructure, and developer support via Qiskit, IBM remains a leader in practical, scalable quantum technology. Rigetti adopts a focused, hardware-first business model tailored to quantum computing, centered around its proprietary modular chip architecture and cloud-based Quantum Cloud Services. It monetizes through direct system access, strategic partnerships, and integration with platforms like Amazon Braket and Azure Quantum. Rigetti targets niche enterprise and research segments, offering flexible deployment and AI-assisted system calibration. In contrast, IBM leverages its vast resources to deliver a full-stack quantum computing model, combining hardware, software (Qiskit), and services under the IBM Quantum Platform. It commercializes through cloud access, consulting, and its 280+ member IBM Quantum Network, which includes Fortune 500 firms and academic institutions. With over $1 billion in cumulative quantum revenue and multi-billion-dollar R&D investments, IBM's business model emphasizes ecosystem dominance, global infrastructure, and long-term enterprise integration. Rigetti's growth strategy centers on scaling modular quantum systems, advancing hardware via ABAA fabrication and AI calibration, and targeting a 108-qubit system by the end of 2025 with halved error rates. It is expanding manufacturing through a $250M Quanta partnership and boosting cloud integration to widen access. While innovation-driven and agile, the strategy is limited by financial constraints and a smaller customer base. IBM's growth strategy focuses on quantum-centric supercomputing via a long-term roadmap, interconnecting modular chips like the 1,121-qubit Condor to achieve fault tolerance. It targets quantum advantage by 2026 through efforts like the '100×100 challenge' and Quantum System Two. Leveraging global infrastructure, enterprise partnerships, and strong R&D funding, IBM prioritizes scalability, reliability, and commercial adoption worldwide. The Zacks Consensus Estimate for RGTI's 2025 sales implies a year-over-year decline of 18.63%. For 2025, loss per share is projected to be 5 cents compared with 36 cents a year ago. The earnings estimates have been trending upward over the past 60 days. Image Source: Zacks Investment Research The Zacks Consensus Estimate for IBM's 2025 sales and earnings implies year-over-year growth of 5.5% and 6%, respectively. The earnings estimates have been trending upward over the past 60 days. Image Source: Zacks Investment Research Both Rigetti and IBM are advancing in the quantum computing space, but they differ significantly in scale, strategy, and market positioning. IBM holds a Zacks Rank #3 (Hold) with a strong Growth Score of 'A', reflecting solid potential driven by its expansive infrastructure, global partnerships, and ambitious quantum roadmap. Rigetti, on the other hand, carries a Zacks Rank #4 (Sell), indicating a challenging short-term prospect. However, its Growth score of 'B' reflects upside potential once the challenges subside. While Rigetti remains a compelling small-cap innovator with modular architecture and technical focus, IBM's full-stack capabilities and enterprise reach give it an edge for investors seeking more stability and long-term commercial traction in the quantum sector. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report International Business Machines Corporation (IBM) : Free Stock Analysis Report Rigetti Computing, Inc. (RGTI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
21-05-2025
- Business
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Rigetti Shares Down 15% Post Q1 Earnings: Time to Buy, Hold or Sell?
Rigetti Computing RGTI shares have plunged 15% following the company's first-quarter 2025 earnings release on May 12. In the first quarter, RGTI reported an adjusted loss per share of 8 cents, along with a sharp decline in revenues of more than 50% year over year. RGTI's earnings and revenues for the reported quarter missed the Zacks Consensus Estimates by 60% and 40.2%, respectively. Rigetti's first-quarter 2025 results raised concerns as revenue fell sharply to $1.5 million, largely due to the timing of milestone-based contracts. Operating expenses also rose to $22.1 million, driven by higher compensation and tax-related costs, highlighting ongoing challenges in scaling operations efficiently. While these figures signal short-term pressures, the company's robust cash position of $237.7 million offers a solid financial cushion. More encouragingly, strategic wins, including a $5.5 million U.S. Air Force grant and securing an investment of $35 million from Taiwan's Quanta Computer, underscore growing institutional confidence in Rigetti's quantum capabilities. Rigetti's shares have underperformed the Zacks Computer & Technology sector and its industry peers, which include IonQ Inc. IONQ, D-Wave Quantum Inc. QBTS and Atlassian TEAM, in the year-to-date period. The RGTI stock has tumbled 35.4% in the year-to-date period. Shares of IONQ and TEAM have plunged 20.5% and 5.7%, respectively. QBTS shares have gained 27.7% during the same period. The broader sector has declined 4.5% over the same timeframe. RGTI has also underperformed the Zacks Internet - Software industry, which has improved 5% in the year-to-date period. Let's delve deeper and determine the best course of action for your portfolio regarding the RGTI stock. RGTI's Price Performance Comparison Image Source: Zacks Investment Research Advancements in Quantum Processor Technology: In the first quarter of 2025, Rigetti achieved a significant scientific milestone through a joint research paper with Harvard University, MIT, and the University of Chicago, published in Nature Physics. The study showcased the successful integration of a hybrid microwave-optical quantum transducer with a Rigetti-fabricated superconducting qubit. This breakthrough enabled optical control of the qubit, eliminating the need for traditional microwave coaxial lines, which are bulky and introduce thermal load, major barriers to scaling quantum systems. Alongside its scientific progress, Rigetti advanced its quantum algorithm capabilities by applying its new 'quantum preconditioning' algorithm to a real-world energy grid problem. Using South Carolina's public energy grid data, the 84-qubit Ankaa-3 system computed the maximum power exchange section, a key grid health metric. The algorithm enhanced the performance of classical optimizers, achieving a relative advantage and high solution accuracy. This marks a significant step toward demonstrating practical quantum advantage in real-world applications. As the quantum computing market continues to evolve, RGTI is poised to benefit. Per a Grand View Research report, the global quantum computing market is expected to witness a CAGR of 20.5% from 2025 to 2030. Major Government and Industry Recognition: Rigetti achieved significant recognition from both government agencies and industry leaders during the first quarter of 2025. Most notably, Rigetti was selected to participate in DARPA's prestigious Quantum Benchmarking Initiative, advancing to Stage A — a six-month performance period focused on their utility-scale quantum computer concept. The company's selection by DARPA is a strong endorsement of its technical vision, positioning Rigetti at the forefront of national efforts to realize practical quantum computing. Rigetti received a $5.48 million grant from the Air Force Office of Scientific Research to advance its Alternating-Bias Assisted Annealing chip technology. Leading a consortium with Iowa State University, RMIT, the University of Connecticut, and Lawrence Livermore National Laboratory, Rigetti aims to tackle superconducting qubit defects. Additionally, the company secured three Innovate UK Quantum Mission Pilot Awards to enhance real-time QEC, upgrade its 36-qubit quantum processing unit, and improve its control stack. Rigetti is also involved in two other Quantum Mission projects focused on integrating digital chip-based technology and creating an open-architecture quantum test bed. These achievements highlight Rigetti's growing leadership in the quantum field. Strategic Partnerships and Investments: Rigetti strengthened its strategic position in the quantum computing ecosystem through a major investment and expanded industry collaborations. The most significant development was the closing of a previously announced strategic investment by Quanta Computer, Inc. In late April, Quanta purchased approximately $35 million worth of Rigetti common stock at a price of about $11.59 per share. This investment not only provides Rigetti with substantial capital to support its technology roadmap and growth initiatives but also deepens the strategic collaboration between the two companies. The partnership with Quanta is expected to accelerate Rigetti's efforts in advancing quantum hardware and potentially open new opportunities for commercial deployment and manufacturing scale. Additionally, the company's ongoing collaboration with Riverlane, a recognized leader in quantum error correction, is central to several government-backed projects, including the DARPA Quantum Benchmarking Initiative and Innovate UK Quantum Mission Pilot Awards. Rigetti is also working with SEEQC to integrate digital chip-based technology with its Novera QPU at the UK's National Quantum Computing Center, and with a consortium including TreQ, Qruise, Q-CTRL, and Oxford Ionics to develop an open-architecture quantum computing test bed. Rigetti is poised for a strong growth phase in 2025, with sales projected to rise 36.4% and an even sharper acceleration of 153.3% in 2026. On the profitability front, EPS is expected to turn positive, with a 44.4% increase in 2025, followed by a 15% rise in 2026, suggesting improved operational efficiency and better cost management. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Image Source: Zacks Investment Research Rigetti's growth is closely tied to regulatory and geopolitical factors, particularly its reliance on U.S. government funding through programs like the National Quantum Initiative. Delays in policy approvals or budget allocations could slow critical R&D efforts and hinder long-term planning. Geopolitical tensions such as tariff hikes on semiconductors or cryogenic equipment pose risks to supply chains, inflate costs, and threaten project timelines. Stricter export controls may limit international collaborations, potentially affecting key initiatives such as Innovate UK. Quantum technology's strategic importance invites heightened regulatory scrutiny, increasing compliance burdens and the risk of sudden policy shifts. Restrictions on partnerships with entities in sanctioned regions may also limit access to global talent and innovation networks. As a result, Rigetti must balance its reliance on public funding with proactive risk management to maintain global competitiveness. Rigetti's stock is not so cheap, as suggested by the Value Score of F. RGTI is currently trading at a price-to-book (P/B) ratio of 22.2X, which is more than four times higher than the industry average of 5.87X. This can mean that investors are valuing the company far above the worth of its actual assets, largely because of its potential in quantum computing rather than its current financial performance. Such a high P/B ratio suggests that the stock is priced for significant growth and innovation, but it also makes it highly sensitive to execution risks or negative news. Price-to-Book Ratio Image Source: Zacks Investment Research Rigetti continues to make impressive progress in quantum technology through innovations in processor design, the practical application of algorithms, and strategic partnerships. Strong sales and earnings growth forecasts suggest improving financial health. However, heavy reliance on government funding, geopolitical risks, and high regulatory burdens pose challenges. With the stock trading at a premium valuation, execution risk remains high. Given the balance of strong innovation potential against near-term external headwinds, valuation concerns and a Zacks Rank of #3 (Hold), Rigetti is best viewed as a stock to watch with a neutral stance for now. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Atlassian Corporation PLC (TEAM) : Free Stock Analysis Report IonQ, Inc. (IONQ) : Free Stock Analysis Report Rigetti Computing, Inc. (RGTI) : Free Stock Analysis Report D-Wave Quantum Inc. (QBTS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
- Business
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Rigetti Computing's (RGTI) Quantum Potential Meets Financial Reality
Rigetti Computing's (RGTI) Q1 results perfectly capture the quantum nature of being in several different states of existence simultaneously. In this case, incredible technological breakthroughs occurred alongside challenging financial results. While the company surprised markets with unexpected profitability and major technical milestones, a dramatic revenue shortfall sent shares tumbling 13% after earnings. While the stock managed to claw back that loss the following few days, it remains 22% lower year-to-date. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter Published last week, Rigetti's results offer compelling reasons for optimism and a sobering reminder of the challenges facing early-stage quantum computing companies. I am long-term bullish on the potential of quantum computing, and Rigetti is among the leaders in the space (though, as there are several paths to market for this nascent technology, I encourage investors to consider spreading their bets across several holdings). Rigetti is a frontrunner in the growing field of full-stack quantum computing. It offers cloud-based quantum computers to various sectors, including government, enterprises, and research organizations. Notably, the company has developed the first-ever multi-chip quantum processor in the industry, paving the way for scalable quantum computing solutions. These processors are manufactured at their dedicated facility, Fab-1, emphasizing Rigetti's commitment to innovation and advancement in quantum technology. The company's recent efforts include creating the 84-qubit Ankaa-3 system, which exhibits improved hardware design and progress in two-qubit gate fidelity. Looking ahead to the rest of 2025, Rigetti has laid out an ambitious roadmap. They're targeting a 36-qubit modular system launch by mid-year and a 100+ qubit system by year-end, with the ultimate goal of achieving 99.9% qubit fidelity by 2027, a threshold many experts believe is necessary for practical quantum advantage in commercial applications. Rigetti posted earnings of $0.13 per share, shocking analysts who expected a loss of $0.05. That sounds fantastic until you dig deeper into the numbers. The company's profit came almost entirely from $62.1 million in accounting gains from changes in how they value specific financial instruments, not from selling more products or improving operations. Meanwhile, the core business told a different story. Revenue plummeted 52% compared to last year's quarter, falling from $3.1 million to just $1.5 million, missing analyst expectations by nearly $1 million. The company's gross margin dropped significantly from 49% to 30%, while operating losses widened from $16.6 million to $21.6 million year-over-year. The one bright spot? A strong cash position of $237.7 million gives Rigetti plenty of runway to fund operations through 2027. While its financial results disappointed, Rigetti's technical achievements in Q1 2025 were impressive. The company successfully applied its new 'quantum preconditioning' algorithm to a real-world energy grid optimization problem using its 84-qubit Ankaa-3 system. It demonstrated to the market the potential of quantum-enhanced performance on a practical problem that classical computers struggle with. Further, the company was selected for Stage A of DARPA's Quantum Benchmarking Initiative, a competitive program focused on developing utility-scale quantum computers. The Air Force Office of Scientific Research awarded them $5.48 million to advance their chip fabrication technology. In the UK, they won three Innovate UK Quantum Mission awards for various projects. Perhaps most impressive was its collaboration with Harvard, MIT, and the University of Chicago on research published in Nature Physics. The team demonstrated coherent optical control of superconducting qubits — a breakthrough that could enable much higher-density quantum processors in the future. Wall Street analysts remain rather bullish on Rigetti's long-term prospects. Based on the most recent recommendations of five analysts, Rigetti Computing is rated a Strong Buy. The average stock price target for RGTI stock is $15, representing a potential upside of almost 27% from current levels. Post-earnings announcement, TD Cowen's Krish Sankar reiterated a Buy rating, pointing to the company's strong technical roadmap and progress toward higher fidelity rates. He sees potential catalysts in the proposed $2.5 billion US National Quantum Initiative reauthorization, which could significantly boost funding for quantum research. Needham's Quinn Bolton also kept a Buy rating, though he did lower his price target from $17 to $15 to reflect near-term execution challenges. Bolton highlighted Rigetti's expanding international presence, particularly their growing footprint in the UK quantum ecosystem, as a positive differentiator. Both analysts emphasized Rigetti's strong balance sheet as a key advantage. With nearly $240 million in cash and a recent strategic investment from Quanta Computer, the company has the financial resources to execute its ambitious technical goals without worrying about running out of money. Rigetti Computing presents a classic high-risk, high-reward investment opportunity in the quantum computing space. The company had taken a leading role in the market and offers meaningful exposure to this potentially transformative technology. However, the next two years will be critical for validating the investment thesis. The stock's short-term volatility could become less important if Rigetti hits its technical milestones. Technical success should translate to more robust commercial applications, creating more predictable income streams over time. I remain bullish on this opportunity. The company's technical progress remains impressive, and its financial position is strong. For investors with a healthy risk appetite, a long-term horizon, and conviction about quantum computing's future, Rigetti's current challenges present an attractive discounted entry point. Disclaimer & DisclosureReport an Issue Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-05-2025
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Should You Buy, Hold, or Sell RGTI Stock Before Q1 Earnings?
Rigetti Computing RGTI is set to report first-quarter 2025 results on May Zacks Consensus Estimate for first-quarter revenues is currently pegged at $2.46 million, indicating a decline of 19.34% year over year. The consensus mark for earnings is currently pegged at a loss of 5 cents per share, unchanged over the past 30 days. The company reported a loss of 14 cents in the year-ago earnings beat the Zacks Consensus Estimate once in the past four quarters while matching the same on two occasions and missing on one, with a negative average surprise of 11.25% (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Rigetti Computing, Inc. price-eps-surprise | Rigetti Computing, Inc. Quote Let's see how things have shaped up prior to this announcement. RGTI's focus on developing high-fidelity Quantum Processor Units and expanding its market presence through partnerships and new customer acquisitions, particularly in government and international markets, is expected to have driven growth in the to-be-reported ongoing collaboration with Quanta Computer is expected to have driven advancements in Rigetti's quantum computing technology in the to-be-reported quarter. With both companies investing more than $100 million, this partnership could lead to enhanced development and commercialization of superconducting quantum launch of Rigetti's 84-qubit Ankaa-3 quantum computer, which has improved performance, is likely to have attracted more customers in the to-be-reported quarter. The availability of this system through major cloud platforms, such as Microsoft MSFT Azure and Amazon AMZN Braket, could further expand its reach. The system will allow users to leverage Amazon and Microsoft platforms for quantum computing integration of AI-driven calibration tools is expected to have improved the efficiency and performance of Rigetti's quantum systems in the quarter to be reported, making them more reliable for customers and potentially attracting more business. RGTI shares have plunged 32.5% in the year-to-date period compared with the Zacks Internet - Software industry's decline of 1.2% and the broader Zacks Computer & Technology sector's decrease of 9.2%. The underperformance can be attributed to increasing macroeconomic challenges and U.S. President Donald Trump's decision to impose tariffs on top trading partners, including China, Mexico and Canada, which has increased the chances of a trade war. Image Source: Zacks Investment Research RGTI stock is not so cheap, as suggested by the Value Score of terms of the forward 12-month Price/Sales ratio, RGTI is trading at 129.25X, higher than the Computer & Technology sector's 5.69X. Image Source: Zacks Investment Research RGTI's expanding clientele, which includes Amazon, Microsoft, Riverlane, NVIDIA NVDA and Quantum Machines, further underscores its growing influence in the quantum computing announcement of the successful application of AI, in collaboration with Quantum Machines, to automate the calibration of its 9-qubit Novera QPU has been noteworthy. This was achieved by leveraging NVIDIA DGX Quantum, enabling high gate fidelities and marking a significant advancement in quantum computing operations. Benefits from the partnership with NVIDIA and Quantum Machines are likely to have been reflected in the to-be-reported quarter's the quantum computing market continues to evolve, RGTI is poised to benefit from its growth. Per a Grand View Research report, the global quantum computing market was valued at approximately USD 1.42 billion in 2024 and is projected to expand at a compound annual growth rate of 20.5% from 2025 to 2030. This bodes well for RGTI's prospects. Rigetti's advancements in the quantum computing space are continuously benefiting the company's top-line challenging macroeconomic uncertainties and intense competition in the rapidly evolving and highly competitive quantum computing market are expected to have negatively impacted the company's top-line growth. These challenges are further compounded by recent remarks from influential industry leaders. Meta CEO Mark Zuckerberg and NVIDIA CEO Jensen Huang have both expressed doubts about the near-term practical applications of quantum computing, suggesting it may take decades to become commercially viable. The concerns raised by these high-profile CEOs have contributed to a market downturn affecting Rigetti in the quantum computing industry. Rigetti's advancements in quantum processors and modular chip architecture will benefit the company. However, stretched valuation, along with stiff competition, is expected to drag down RGTI shares in the near Rigetti carries a Zacks Rank #3 (Hold), implying that investors should wait for a better entry point to accumulate the stock. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Rigetti Computing, Inc. (RGTI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
