Rigetti Computing RGTI is drawing renewed investor attention following its second-quarter 2026 results, as strong revenue growth, technology progress and expanding customer engagement strengthen the long-term quantum computing story. Revenues surged 185% year over year to $5.1 million, driven by on-premises Novera QPU sales.
Management highlighted progress on the 108-qubit Cepheus-1 system, growing commercial traction and strategic collaborations with HPE and the Pittsburgh Supercomputing Center. The potential funding up to $100 million from the U.S. Department of Commerce also adds another layer to Rigetti's growth prospects, although the funding agreement has yet to be finalized.
Yet, the investment case is far from straightforward. Rigetti continues to operate at a significant loss, with operating expenses rising to $30.3 million in the second quarter, while commercialization remains at an early stage and quarterly revenue can fluctuate with large system deliveries. At the same time, peers IonQ IONQ, D-Wave Quantum QBTS and Quantum Computing Inc. QUBT are also competing for investor attention as the quantum computing race intensifies. With Rigetti targeting major technology milestones, including higher fidelity and a path toward roughly 1,000 qubits, the key question for investors is whether second-quarter execution has strengthened the stock's case for a Buy or whether its ambitious roadmap and ongoing losses call for a more cautious Hold stance.
RGTI Stock’s Price Performance
In the year-to-date period, Rigetti shares have lost 20.4%, reflecting continued volatility across the quantum computing sector. Among its peers, IonQ has performed relatively better, losing 5.3%, while QUBT and QBTS have plunged 13% and 22.8%, respectively.
The broader Zacks Internet Software industry has slipped just 3.1% over the same period, outperforming all four quantum computing stocks. Rigetti has been the second-worst performer in the group, ahead of only QBTS, highlighting continued investor caution toward the sector despite growing interest in quantum computing and Rigetti's technology progress.
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What’s Supporting the Bull Case for RGTI?
Strong Q2 Revenue Growth Signals Improving Commercial Traction: Rigetti delivered a strong top-line performance in the second quarter. Revenues surged 185% year over year to $5.1 million, primarily driven by on-premises Novera QPU sales. Management also noted that commercial interest in quantum computing is increasing, with the company’s first two 9-qubit systems delivered this year going to commercial organizations. This marks an encouraging shift beyond Rigetti’s traditional research and government customer base.
Rigetti is also expanding access to its systems through cloud and on-premises deployments. Its 108-qubit Cepheus-1 system is available through Rigetti Quantum Cloud Services, Amazon Braket, Microsoft Azure Quantum and qBraid. The company expects to recognize revenues from its $8.4 million C-DAC order for a 108-qubit system in the fourth quarter. These developments could help broaden its customer base as enterprises move from quantum research toward practical experimentation.
Technology Progress Strengthens Rigetti’s Quantum Roadmap: Rigetti continues to make progress on the technology front. Its 36-qubit system achieved a 99.6% median two-qubit gate fidelity in the second quarter, up from 99.5% in the first quarter. Management attributed much of the improvement to design optimization and said these learnings are being incorporated into the 108-qubit platform and future systems. The company also expects further fidelity improvements at the 108-qubit level before year-end.
Rigetti is targeting a much larger leap over the next few years. Management remains focused on reaching roughly 1,000 qubits, 99.9% two-qubit gate fidelity and sub-40-nanosecond gate speeds in about three years. Efforts to improve coherence time could be important to achieving these goals, with the company targeting a two- to three-fold improvement from the current 25-to-30 microsecond range.
Strategic Partnerships and Government Support Add to Growth Potential: Rigetti's strategic relationships are becoming another important part of its growth story. The company expanded its collaboration with HPE and the Pittsburgh Supercomputing Center to deploy a 9-qubit Novera system in an HPE-powered supercomputing environment. The project aims to demonstrate hybrid quantum-classical workloads on real hardware. Management expects the system to be delivered in 2027.
Government support could provide another meaningful catalyst. The U.S. Department of Commerce has selected Rigetti for a potential award of up to $100 million over three years to accelerate superconducting quantum computing R&D. The funding could help address scaling bottlenecks and accelerate development at Fab-1. While the agreement is yet to be finalized, the potential funding and growing government interest in quantum computing strengthen the strategic backdrop for Rigetti.
What's Holding Back the RGTI Investment Story?
Revenue Growth Remains Dependent on Large System Deliveries: Rigetti's strong second-quarter revenue growth is encouraging, but the underlying revenue profile remains uneven. Management acknowledged that revenues remain influenced by the timing of system deliveries and government-funded projects.
Commercial adoption is also still at an early stage. Management said that customers are largely using Rigetti's systems for research, algorithm development and experimentation rather than practical workloads. While commercial interest is increasing, meaningful adoption remains tied to improvements in quantum performance. This could keep revenue growth volatile in the near term.
Heavy R&D Spending Continues to Weigh on Profitability: Rigetti continues to invest heavily to advance its quantum roadmap. Operating expenses rose to $30.3 million in the second quarter from $20.4 million a year ago. Higher spending on engineering, chip design, fabrication, control electronics and refrigeration contributed to an operating loss of $28.1 million.
The company also remains far from profitability. Its adjusted net loss widened to approximately $16 million, or 5 cents per share, from $13.3 million a year ago. Rigetti expects elevated capital expenditures in 2026 as it invests in Fab-1 and dilution refrigeration capacity. These investments are important for its long-term roadmap but could keep cash burn elevated.
RGTI’s Shares Look Overvalued
Rigetti stock is not so cheap, as suggested by the Value Score of F.
Rigetti is currently trading at a price-to-book (P/B) ratio of 10.05X, which is higher than the industry average of 4.98X.
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RGTI’s Sales & EPS Picture
In 2026, Rigetti is expected to experience a 257.3% improvement in revenues. On the profitability front, the company is expected to remain in loss but estimates reflect loss per share narrowing by 71.9% year over year.
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How to Approach RGTI Stock
Rigetti's second-quarter execution provides several reasons for optimism. Revenue growth was strong, commercial interest is increasing, and the company continues to advance its 108-qubit platform. Its HPE collaboration, potential $100 million Department of Commerce funding and roadmap toward roughly 1,000 qubits add to the long-term opportunity. Rigetti also ended the second quarter with $541.3 million in cash, cash equivalents and investments and no debt, providing financial flexibility to fund its technology initiatives.
However, the investment case remains balanced. Commercial adoption is still in its early stages, while heavy R&D spending continues to drive substantial losses. Revenues also remain dependent on the timing of large system deliveries and government-funded projects. The potential Department of Commerce funding is encouraging, but the agreement has yet to be finalized and could involve equity issuance.
With a Zacks Rank #3 (Hold), investors may want to maintain a cautious stance on RGTI. The company's second-quarter progress supports its long-term potential, but stronger evidence of commercial adoption and continued technology improvements are needed before taking a more bullish view.
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This article originally published on Zacks Investment Research (zacks.com).