Will Renewed NQI Funding Fuel Rigetti's Government Sales Pipeline?

Core Insights - Rigetti Computing (RGTI) is focusing on government partnerships as a key strategy for commercialization, with recent revenue declines attributed to the expiration of the U.S. National Quantum Initiative (NQI) [1][8] - The reinstatement of the NQI program with a budget of $625 million over five years is expected to enhance demand from national labs and government agencies [2] - Rigetti has secured significant government contracts, including a $5.8 million deal with the Air Force Research Laboratory, which is anticipated to contribute to revenue in the upcoming quarters [3][4] Revenue and Financial Performance - In the third quarter, Rigetti reported revenue of $1.9 million, down from $2.4 million year-over-year, primarily due to the lapse of NQI funding [1][8] - The reinstated NQI funding is expected to provide a demand boost as federal purchasing cycles resume [2] - Rigetti's shares have increased by 74.1% year-to-date, contrasting with a slight decline in the industry [7] Government Contracts and Pipeline - Rigetti's recent contract wins, including a three-year contract with the Air Force, indicate a strengthening government pipeline and a shift towards hardware deployment [3][4] - The company has significant cash reserves and no debt, allowing it to scale operations and deepen federal partnerships as NQI funding resumes [4] Valuation and Earnings Estimates - Rigetti's price-to-book ratio stands at 22.2, which is above the industry average, and it carries a Value Score of F [10] - The Zacks Consensus Estimate for Rigetti's 2025 earnings suggests an 88.9% decline compared to the previous year [11]