Rigetti Computing (NasdaqCM:RGTI) FY Conference January 13, 2026 12:45 PM ET Company ParticipantsSubodh Kulkarni - President and CEOConference Call ParticipantsQuinn Bolton - Senior AnalystQuinn BoltonOkay. Thank you, everybody. Welcome to Needham's 20th Annual Growth Conference. My name is Quinn Bolton. I'm the semiconductor and quantum computing analyst for Needham. It's my pleasure to host this fireside chat with Rigetti Computing. Founded in 2013 and headquartered in Berkeley, California, Rigetti is a p ...

Core Insights - Rigetti Computing's update on its 108-qubit Cepheus-1-108Q system indicates a focus on performance discipline, delaying general availability to late Q1 2026 for further testing and optimization to achieve 99.5% median two-qubit gate fidelity [1][9] Company Updates - Rigetti has demonstrated 99% median two-qubit fidelity on the 108-qubit system and higher fidelities on its 9-qubit and 36-qubit platforms, indicating that the technical foundation is solid despite the delay [2][9] - The complexity of scaling modular quantum systems is highlighted, with the Cepheus-1-108Q system comprising 12 9-qubit chiplets connected via tunable couplers, leading to new engineering challenges [3] - Rigetti's decision to refine chiplet couplers suggests a commitment to launching a system that meets performance benchmarks rather than rushing to market [3][4] Market Position - The timeline adjustment may enhance Rigetti's credibility with partners and customers who value reliable quantum performance, positioning the update as a strategic recalibration for long-term value creation [4] - Rigetti's shares have increased by 99.9% over the last six months, contrasting with a 7.6% decline in the industry [8] Valuation and Earnings Estimates - Rigetti trades at a price-to-book ratio of 22.66, which is above the industry average, and carries a Value Score of F [11] - The Zacks Consensus Estimate for Rigetti's 2025 earnings indicates an 88.9% decline from the previous year [12]

Investor Presentation January 2026 Cautionary Notes Forward Looking Statements: Certain statements in this presentation may be considered forward-looking statements, including statements with respect to the Company's outlook and expectations, including expectations with respect to a plan to deliver 108Q chiplet-based system at 99.5% median 2Q gate fidelity around the end of Q1 2026 and to reach 1,000+Q at 99.9% median 2Q median fidelity at <50 ns gate speed in 3-5 years to enable quantum advantage; an antic ...

Core Insights - AST SpaceMobile is positioned to experience significant revenue growth, with projections indicating a 1,200% increase in sales to $57.3 million in 2025, followed by a further 311% growth to $235.6 million in 2026 [4] - The company's strategy of partnering with over 50 global mobile network providers, covering nearly 3 billion cellular subscribers, is expected to facilitate a rapid increase in revenue without the need to build a competing network [2] - AST SpaceMobile's BlueBird satellites aim to provide 4G and 5G services using existing smartphone technology, offering a seamless transition for wireless operators and potentially revolutionizing global broadband coverage [3] Group 1: Company Overview - AST SpaceMobile's current valuation stands at $33.3 billion, which raises concerns about the potential for error in its high-growth projections [7] - The company has successfully secured partnerships with major wireless operators, which is crucial for its growth strategy [2] Group 2: Market Context - The stock market has seen substantial gains, with the Dow Jones, S&P 500, and Nasdaq Composite increasing by 45%, 78%, and 122% respectively from the beginning of 2023 to the end of 2025 [6] - The overall market sentiment is driven by the performance of growth stocks and emerging technologies, including artificial intelligence and quantum computing [6]

Company Overview - Rigetti Computing specializes in quantum computing hardware and cloud-based quantum services, utilizing proprietary superconducting technology to deliver scalable quantum solutions [7] - The company generates revenue through integrated solutions that allow clients to access quantum computing resources on various cloud infrastructures [1] Recent Transaction - On January 2, 2026, Dr. Alissa Fitzgerald, a Board member, sold 59,316 shares of Rigetti Computing for approximately $1.3 million, at a weighted average price of $22.41 per share [5][6] - This sale reduced her direct ownership by 63.1%, leaving her with 34,675 shares, which is about 9.3% of her holdings as of February 2024 [3][5] Historical Context - The recent sale size is more than double Dr. Fitzgerald's recent median sell size of 25,000 shares and is the largest since June 2025 [4] - Dr. Fitzgerald's holdings have declined by over 90% since February 2024, indicating a sustained pattern of depletion [5][3] Market Performance - Rigetti's stock has appreciated over 150% in the past year, driven by investor interest in the quantum computing sector [9] - Despite this growth, the company reported sales of only $1.9 million in the third quarter of the previous year, down from $2.4 million in 2024 [10] Future Outlook - The company faces challenges as quantum computing is still in its infancy, with technical hurdles such as high calculation error rates hindering mass adoption [10] - Rigetti missed the release of its new Cepheus-1-108Q system, which has been delayed to the end of Q1 2026 [10]

Core Insights - Quantum computing stocks, including IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc., are experiencing significant hype and price increases, but historical trends suggest a potential bubble burst in the near future [3][6][22] Group 1: Market Dynamics - The quantum computing sector is projected to contribute up to $850 billion to global GDP by 2040, creating a substantial addressable market that has driven stock prices up dramatically [4][6] - Since October 1, 2024, the stock prices of IonQ, Rigetti, D-Wave, and Quantum Computing Inc. have surged by 521%, 3,270%, 3,290%, and 1,790% respectively, indicating extreme investor enthusiasm [5][6] Group 2: Financial Considerations - Early-stage quantum computing companies are expected to face operating losses and cash burn, leading to share-based dilution as a common practice for raising capital [7][9] - IonQ raised $2 billion through a stock offering, selling shares at $93, which has since decreased to $50.76, highlighting the risks of dilution for existing investors [8] Group 3: Valuation Challenges - Traditional valuation metrics are difficult to apply to early-stage companies with no earnings, but the price-to-sales (P/S) ratio can provide insights; historical data shows that P/S ratios above 30 are unsustainable [11][12] - Current P/S ratios for leading quantum computing stocks indicate they remain in bubble territory, suggesting potential for significant price corrections [13] Group 4: Market Environment - The overall stock market is currently at a high valuation, with the S&P 500's Shiller P/E Ratio nearing 41, which historically signals potential downturns for high-priced stocks [15][16] - Volatility in the market tends to disproportionately affect the most expensive stocks, which could include quantum computing companies that have not yet proven their business models [17] Group 5: Competitive Landscape - The barrier to entry in the quantum computing industry is lower than perceived, with established tech giants like Alphabet and Microsoft developing their own quantum technologies, posing a threat to current players [18][21] - The first-mover advantage held by current quantum computing companies may be eroded as larger firms with more capital and resources enter the market [20][21]

Core Insights - Rigetti Computing is revising its roadmap and adjusting the general availability date for its 108-qubit quantum computing system, Cepheus™-1-108Q, now expected by the end of Q1 2026 [1] Group 1: System Development and Performance - The company is making strong progress with Cepheus-1-108Q but is taking additional time to test and optimize the system to meet performance standards [2] - Rigetti aims to achieve a median two-qubit gate fidelity of 99.5% and has reported current fidelities of 99% for the 108-qubit system, 99.7% for the 9-qubit system, and 99.6% for the 36-qubit system [2] - Cepheus-1-108Q is based on twelve 9-qubit chiplets and utilizes Rigetti's proprietary modular chip architecture, making it the highest qubit count system to date and the largest modular quantum computing system in the industry [2] Group 2: Technology and Infrastructure - Rigetti's quantum computers are based on superconducting qubits, which are considered the leading qubit modality due to their maturity, scalability, and fast gate speeds [3] - The current gate speeds for Rigetti's quantum computing systems range from 50-70 nanoseconds, which is approximately 1,000 times faster than other modalities like ion traps and neutral atoms [3] - The company operates quantum computers via its Rigetti Quantum Cloud Services (QCS) platform, providing high-performance integration with public and private clouds for practical quantum computing [4] Group 3: Product Offerings - Rigetti sells on-premises quantum computing systems ranging from 9 to 108 qubits, supporting national laboratories and quantum computing centers [5] - The 9-qubit Novera QPU is designed for high-performance, on-premises use, allowing integration with existing cryogenic and control systems [5] - Rigetti developed the industry's first multi-chip quantum processor for scalable systems and deployed the largest multi-chip quantum computer in 2025 with Cepheus-1-36Q [6]

Core Viewpoint - Rigetti Computing's stock experienced a dramatic rise followed by a significant decline, raising questions about its future performance and potential as an investment opportunity [1][2]. Company Overview - Rigetti Computing specializes in quantum computing, producing both modular and non-modular quantum processing units (QPUs) and offering a cloud-based platform for developers to create quantum algorithms [6]. - The company employs superconducting loops to achieve quantum states, but its systems require cryogenic refrigeration, which increases size and operational costs [5]. Financial Performance - Rigetti's revenue grew by 60% in 2022 but saw a decline of 8% in 2023 and 10% in 2024, with expectations of a further 30% drop to $7.6 million in 2025 [7][8]. - The company's annual net loss increased from $72 million in 2022 to $201 million in 2024, with projections of a loss widening to $215 million in 2025 [9]. Market Position and Competition - Rigetti faces intense competition from major players like IBM and Google, which utilize similar technologies, as well as IonQ, which offers alternative systems that do not require cryogenic refrigeration [8]. - The expiration of key contracts, such as with the U.S. National Quantum Initiative, has contributed to Rigetti's revenue challenges [8]. Future Outlook - Despite current challenges, Rigetti anticipates significant growth in computing power, aiming to deploy systems with over 100 qubits by early 2026 and over 1,000 qubits by the end of 2027 [10]. - Analysts project a revenue increase of 169% to $20.5 million in 2026 and 124% to $45.8 million in 2027, alongside expectations of narrowing annual net losses [10]. Stock Valuation - Rigetti's stock, even after a significant decline, is valued at $8.3 billion, which is 182 times its projected 2027 sales, indicating a potentially overvalued position relative to its growth prospects [12]. - The company's market cap reached $18.3 billion at its peak, reflecting an unsustainable valuation of 2,408 times its projected revenue for 2025 [11]. Risks and Challenges - Rigetti has missed its initial target for launching a 100+ qubit system, and any further delays could hinder its ability to compete effectively in the market [13]. - The company has increased its outstanding shares by 160% over the past three years, leading to dilution that may continue to affect stock value [12].

Core Insights - Rigetti Computing (RGTI) stock has seen a remarkable 151% increase over the past year, but recent performance indicates a reassessment of future upside potential due to a weaker third-quarter performance marked by declining revenues and lower gross margins [1][6] - The company has secured new contracts and partnerships, including a multi-year agreement with the Air Force Research Laboratory, while reaffirming its technological roadmap towards larger qubit systems by 2026 and 2027 [2][8][10] Financial Performance - RGTI's revenues for the third quarter fell to $1.9 million, an 18% year-over-year decline, primarily due to a funding gap related to the National Quantum Initiative and inconsistent government contract awards [13] - Gross margins have compressed to 21%, driven by a higher proportion of lower-margin contracts, while operating expenses rose to $21 million due to increased R&D investments and compensation costs [14] Competitive Landscape - Rigetti faces competition from companies like IonQ, which is gaining traction with trapped-ion technology, and D-Wave Quantum, which focuses on enterprise use cases [3] - Quantum Computing Inc. is positioning itself around software and government solutions, presenting a different risk-reward profile compared to Rigetti's hardware-focused strategy [3] Strategic Developments - The company is expanding its ecosystem through partnerships, including a memorandum of understanding with India's C-DAC and the deployment of a 9-qubit Novera system at Montana State University, which may enhance future research collaborations [9] - Rigetti's roadmap includes plans for a 100-plus qubit system with high fidelity metrics, which will be crucial for maintaining investor confidence as the company approaches its 2026 milestones [10] Valuation Concerns - RGTI's stock is considered overvalued, with a price-to-book (P/B) ratio of 22.38X, significantly higher than the industry average of 6.1X, indicating potential concerns regarding its current valuation [15] Investment Outlook - The company is viewed as a speculative investment in the quantum computing sector, with tangible progress on its technology roadmap but an unsettled financial profile [18] - The period leading up to 2026-2027 will be critical for Rigetti, as its ability to convert technological advancements into sustainable revenue growth will be essential for maintaining investor confidence [19]

Core Viewpoint - Quantum computing stocks, including Rigetti, D-Wave, and IonQ, have seen significant returns over the past three years, but their valuations are bubble-like and likely to collapse by 2026 due to a lack of corresponding sales and earnings growth [1][12]. Group 1: Market Overview - Quantum computing is currently a microscopic market, with sales projected to reach $4.2 billion by 2030, compared to the AI market, which is expected to total $1.8 trillion, making AI 425 times larger [8]. - General-purpose quantum computers are estimated to be a decade or two away from being useful for most enterprises, with experts suggesting that tens of thousands to millions of physical qubits will be necessary for practical applications [2][3]. Group 2: Company Performance - Rigetti Computing's shares have increased by 3,210%, D-Wave Quantum's shares by 1,970%, and IonQ's shares by 1,290% over the past three years [5]. - Rigetti specializes in superconducting quantum computing with plans to launch 1,000-qubit systems by the end of 2027, while D-Wave focuses on quantum annealing with 5,000 qubits in its most advanced systems, and IonQ specializes in trapped-ion quantum computing with a goal of 20,000 qubits by 2028 [6]. Group 3: Valuation Metrics - Rigetti shares trade at 928 times sales, D-Wave at 362 times sales, and IonQ at 150 times sales, with projected revenue growth rates of 124%, 69%, and 84% annually through 2027, respectively [13]. - The current valuations of these quantum computing stocks are significantly higher than the most expensive stocks in the S&P 500, which trade at an average of 55 times sales, indicating that Rigetti would need to fall 94%, D-Wave 84%, and IonQ 63% to align with those valuations [11].