Rigetti Computing's 2,400% Surge in Quantum Computing Stocks: Why Explosive Growth May Disguise Fundamental Weakness

The recent bull run in quantum computing stocks has captivated investors, and few examples illustrate this phenomenon better than Rigetti Computing (NASDAQ: RGTI). The company’s shares have skyrocketed more than 2,400% since early 2023, making it one of the most eye-catching performers in the emerging quantum technology sector. Yet beneath this impressive headline number lies a troubling reality: the stock’s stratospheric rise appears divorced from the company’s actual business fundamentals. Before jumping into the Rigetti narrative, it’s worth understanding why a company with such spectacular price momentum should give investors serious pause.

The Revenue Generation Challenge: Rigetti’s Minimal Sales Tell An Uncomfortable Story

One of the most glaring disconnects between Rigetti’s stock price and its business performance emerges when examining the company’s actual revenue picture. In its most recent quarterly results, Rigetti reported just $1.9 million in sales—and that figure represented an 18% decline from the same quarter a year earlier. For any company claiming growth status, declining revenue is an immediate red flag that demands explanation.

The profitability situation compounds this concern. The company posted a GAAP net loss of $201 million in a recent quarter, underscoring the vast chasm between where Rigetti is today and where profitability lies. More troublingly, management has provided a timeline for reaching commercial viability that tests investor patience: according to Rigetti’s Chief Executive Officer Subodh Kulkarni, meaningful revenue generation won’t materialize until the company achieves “Narrow Quantum Advantage.” In his words from recent earnings discussions, that milestone lies “at least three years from now, maybe four to five years from now.”

Consider what this timeline means in practical terms: investors contemplating a Rigetti position today must be prepared to potentially wait a half-decade or longer without seeing meaningful revenue growth. For many market participants, that’s an exceptionally long stretch to maintain conviction in any stock, particularly one with minimal current sales.

The Valuation Disconnect: When Price Tags Defy Financial Reality

Even if you’re willing to embrace a patient long-term stance and accept the extended waiting period, the valuation mathematics around Rigetti become increasingly difficult to justify. The company’s price-to-sales (P/S) ratio currently sits at an eye-watering 824—a figure that becomes almost incomprehensible when compared to the average tech stock P/S ratio of just 9.

Yes, tech growth stocks frequently command premium valuations. However, these premiums historically correlate with rapid sales expansion and a clear path to profitability. Rigetti offers neither. The company is asking investors to pay a 92-fold premium over typical technology valuations for a business with revenue in free fall and no near-term catalyst for generating substantial sales. This isn’t merely expensive; it represents a fundamental disconnect between market price and economic reality.

Put differently, investors paying current prices are essentially betting on an unproven technology while accepting an astronomical valuation multiple that offers no historical precedent or financial justification.

Quantum Computing As An Investment Category: High Ambition Meets High Uncertainty

Adding an additional layer of risk to any Rigetti investment is the inherent uncertainty embedded within quantum computing itself as a technology category. The promise remains compelling—quantum computers could theoretically solve problems classical computers cannot. However, that promise remains largely theoretical, and the commercial timeline remains murky.

Even industry leaders like Alphabet, which has developed proprietary quantum processors and recently launched new quantum algorithms, acknowledge that “useful” quantum computing remains roughly a decade away from deployment. If one of the world’s most advanced technology companies views practical quantum computing as years off, that provides telling context for Rigetti’s position. The company is asking investors to fund development of a technology that may not prove commercially viable for many years—and there’s no guarantee the market will embrace quantum computing solutions even if the technology does mature.

This creates a compound risk scenario: investors aren’t just waiting for revenue; they’re betting that quantum computing delivers on its technological promises and that Rigetti will successfully compete when commercial applications finally emerge. Without proof that the technology works or that meaningful market demand exists, backing Rigetti becomes an exercise in pure speculation.

Making The Investment Decision: Why Caution Outweighs Momentum

The allure of quantum computing stocks remains understandable, and Rigetti’s dramatic price appreciation offers surface-level validation for believers in the thesis. However, three distinct risk factors should temper enthusiasm: minimal current revenue coupled with multi-year paths to profitability, astronomical valuation metrics that dwarf historical tech sector norms, and the fundamental uncertainty surrounding when—or whether—quantum computing delivers practical commercial value.

For investors considering Rigetti, the core question isn’t whether quantum computing matters as a future technology. Rather, it’s whether paying 824 times sales for a company with $1.9 million in quarterly revenue, declining revenue trajectory, and a 3-5 year wait until management expects meaningful sales represents prudent capital allocation. The historical precedent from quantum computing stocks suggests that patience may ultimately be rewarded—but so far, Rigetti has offered investors exciting price action rather than business progress to match.