Why Rigetti Stock is Up 2,800% and What Happens Next

Core Insights - Rigetti Computing, Inc. (RGTI) has seen its shares increase by over 2,800% in the past year due to excitement surrounding its quantum computing advancements, but concerns about its weak fundamentals and high valuation persist [1][8] Group 1: Quantum Technology Developments - Rigetti's 36-qubit quantum system achieved 99.5% accuracy in key operations, aiming for a 100+ qubit chiplet-based system by year-end [1] - The company signed a $5.8 million deal with the U.S. Air Force Research Laboratory to develop quantum networking technology and received orders for two 9-qubit Novera quantum computing systems worth nearly $5.7 million [2] - Capital is flowing into the quantum computing sector, with JPMorgan Chase & Co. planning to invest about $10 billion in innovative fields, including quantum computing, which has positively impacted Rigetti's stock [3] Group 2: Financial Performance and Valuation - Rigetti's operating losses increased by 24% year over year to $19.8 million in Q2, while revenues fell by 42% to $1.8 million [6] - The company's forward price-to-sales (P/S) ratio stands at an astronomical 1,348.30, compared to the Internet - Software industry's 6.28, indicating vulnerability to market corrections [7] Group 3: Competitive Landscape and Future Outlook - Rigetti's business model, which includes its own quantum processing units (QPUs), programming language, and Quantum Cloud Services (QCS) platform, provides a competitive edge [5] - Despite ongoing contracts and breakthroughs, the uncertainty of sustaining explosive growth remains, especially with competition from larger players like Alphabet Inc. and IBM [6][7] - Overall, there are indications that RGTI stock may be a bubble, with risk-averse investors advised to avoid it, while risk-takers might consider potential growth opportunities [9]