A Look At Rigetti Computing (RGTI) Valuation After Quantum Setbacks And Stock Volatility

Rigetti Computing (RGTI) is back in focus after postponing its planned 108 qubit Cepheus 1 108Q system and failing to progress in DARPA's Quantum Benchmarking Initiative, developments that highlight meaningful competitive pressures.

See our latest analysis for Rigetti Computing.

The DARPA setback and postponement of Cepheus 1 come after a sharp pullback, with a 7 day share price return of an 11.82% decline and a 90 day share price return of a 50.28% decline, even though the 1 year total shareholder return is 78.94% and the 3 year total shareholder return is a very large gain. This suggests that long term enthusiasm has been tempered recently as investors reassess execution risks.

If Rigetti's volatility has you thinking about where else capital could work, this is a useful moment to scan high growth tech and AI stocks as another way to position around quantum and AI themes.

With Rigetti now trading at a large intrinsic discount and well below the average analyst price target, the question is simple: is the recent sell off an entry point, or is the market correctly pricing its future growth?

Most Popular Narrative: 42.7% Undervalued

Rigetti Computing's most followed narrative pegs fair value at $38.40 against the last close of $22.01, a sizable gap that hinges on aggressive future scaling.

The roadmap to 150 plus qubits at an anticipated 99.7% median 2 qubit gate fidelity in 2026 and 1,000 plus qubits at an anticipated 99.8% median 2 qubit gate fidelity in 2027 positions Rigetti to participate in the wider adoption of high performance quantum systems, which could support higher system pricing and improve gross margins as performance increases.

Read the complete narrative.

Curious what kind of revenue ramp and margin shift are baked into that qubit roadmap? The narrative leans on bold growth assumptions and a rich future earnings multiple.

Result: Fair Value of $38.40 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, those assumptions run into real friction if high operating losses persist or government dependent revenue stays uneven, which could strain cash and delay self-funded expansion.

Find out about the key risks to this Rigetti Computing narrative.

Build Your Own Rigetti Computing Narrative

If you are not on board with this story, or you would rather test the numbers yourself, you can pull the data together and shape your own view in just a few minutes, then Do it your way.

A great starting point for your Rigetti Computing research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

Ready for more investment ideas?

If Rigetti has sharpened your thinking, do not stop here. Your next smart move could be finding companies that already fit the themes and financial traits you care about.

• Target potential upside by scanning these 877 undervalued stocks based on cash flows that the market may be pricing conservatively based on current cash flows.
• Explore future tech trends by checking out these 24 AI penny stocks that tie artificial intelligence to real businesses and revenue models.
• Consider opportunities in quantum computing by reviewing these 23 quantum computing stocks that sit closer to the hardware and infrastructure side of the story.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com