TLDR
- Rigetti Computing (RGTI) stock dropped 9.87% on Wednesday, marking its fifth straight day of losses following disappointing Q3 earnings results.
- Net loss ballooned to $200.97 million from $14.8 million year-over-year, while revenues fell 20% to $1.9 million from $2.38 million.
- Benchmark lowered its price target from $50 to $40 but maintained a Buy rating, citing broader momentum slowdown in quantum technology.
- The company plans to deliver a 100+ qubit system by end of 2025, a 150+ qubit system by 2026, and a 1,000+ qubit system by 2027.
- Despite the recent pullback, RGTI stock remains up 107% year-to-date, with Benchmark suggesting investors consider buying on further weakness.
Rigetti Computing stock took another hit on Wednesday, dropping 9.87% to close at $28.30 per share. The decline marked the fifth consecutive day of losses for the quantum computing company.
The selloff came after Rigetti released its third quarter financial results. The numbers weren’t pretty.
Net loss exploded to $200.97 million, up 1,258% from $14.8 million in the same period last year. Revenue dropped 20% year-over-year to $1.9 million from $2.38 million.
The earnings per share came in at -$0.03, which actually beat analyst expectations of -$0.05. But the revenue miss was hard to ignore. Wall Street had been expecting $2.17 million.
Operating expenses increased during the quarter, adding to investor concerns. The company is burning through cash as it develops its quantum computing technology.
Future Product Roadmap
Despite the rough quarter, Rigetti laid out its plans for the coming years. The company expects to deliver a 100+ qubit chiplet-based quantum system by the end of 2025. The system should have 99.5% median two-qubit gate fidelity.
By the end of 2026, Rigetti targets a 150+ qubit system with 99.7% median two-qubit gate fidelity. The roadmap extends to 2027 with plans for a 1,000+ qubit system featuring 99.8% median two-qubit gate fidelity.
CEO Subodh Kulkarni struck an upbeat tone in the earnings statement. He highlighted strong demand for on-premises quantum computers.
“This past quarter, we saw strong momentum with both the demand for our on-premises quantum computers and the development of collaborations to advance our own R&D,” Kulkarni said. He pointed to the company’s work with the Air Force Research Laboratory and QphoX on superconducting quantum computer networking.
Analyst Response
Benchmark adjusted its outlook on the stock following the earnings release. The firm lowered its price target from $50 to $40 while keeping a Buy rating.
The adjustment reflects a broader slowdown in momentum across quantum technology stocks. Recent volatility in emerging technology and AI sectors has cooled investor enthusiasm.
Benchmark analyst noted that Rigetti’s chiplet-based architecture continues to show promise. The firm believes the company’s long-term investment case remains solid.
Strategic partnerships are expanding. Public and private funding continues to flow into the sector.
The stock has had a wild ride this year. Shares surged through mid-October before entering a consolidation phase. Despite the recent losses, RGTI remains up 107% year-to-date and 6% quarter-to-date.
Benchmark views the current pullback as a healthy correction. The firm suggested investors could look for buying opportunities if the stock weakens further. The next catalysts for the quantum computing company are still developing.
Rigetti holds more cash than debt on its balance sheet. The current ratio stands at 39.22, providing some financial cushion. The company reported a negative EBITDA of $73 million for the last twelve months.
Benchmark’s price target of $40 sits in the middle of the analyst range of $18 to $51. The consensus recommendation among analysts remains a Strong Buy.
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