Rigetti Stock Soars 5900 Percent But Is This Quantum Leap Real

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•  09 Oct 2025
 

•   RGTI  
   
  -2.94%

$RGTI stock has skyrocketed 5,900% over the past year, climbing from 80 cents to around $46 per share and pushing the company's market capitalization to $15 billion. The quantum computing firm has captured extraordinary attention on Wall Street, but with annual revenues of just $8 million, investors are sharply divided on whether this represents genuine commercial breakthrough or a dangerous disconnect from economic fundamentals.

Benchmark analyst David Williams isn't concerned about bubble talk. He recently raised his price target for RGTI from $20 to $50, suggesting another 10% upside potential from current levels while maintaining his buy rating. Williams argues the quantum computing sector has undergone a dramatic valuation shift in recent months, driven by accelerating innovation, expanding ecosystem development, and emerging business models that point toward commercialization arriving sooner than previously expected.

The technical achievements backing this enthusiasm are substantial. Rigetti announced in mid-July that it successfully demonstrated the industry's largest multi-chip quantum computer, achieving 99.5% accuracy on two-qubit operations simultaneously while cutting the previous error rate in half. Williams has long believed Rigetti's chiplet-based approach, which connects multiple chips together, represents the most promising path for scaling quantum computers. The recent demonstration validates this confidence with what he describes as a significant and highly encouraging milestone.

Last week brought more concrete evidence of commercial traction when RGTI reported $5.7 million in purchase orders for two 9-qubit Novera systems scheduled for delivery in the first half of 2026. One system went to an Asian technology manufacturer building quantum expertise, while the other was purchased by a California startup focused on artificial intelligence and applied physics. While the dollar amount may seem modest, the significance lies in quantum technology moving from laboratories into real customer hands.

Rigetti is also securing government funding that validates its technical capabilities and market position. The company recently received a $5.8 million three-year grant from the Air Force Research Laboratory to develop technology enabling quantum computers to connect through fiber optic networks, working alongside QphoX. Williams sees this project advancing Rigetti toward scalable modular architectures where quantum computers can be networked together to multiply their computational power.

The elephant in the room remains impossible to ignore. A $15 billion market cap against $8 million in annual revenue creates a revenue multiple of 2,000. General Motors, an American industrial icon, sold $47 billion worth of vehicles last quarter yet carries a market cap below $55 billion. The combined valuation of four pure-play quantum computing companies, including RGTI, IonQ, D-Wave, and Quantum Computing, which together generated $26 million in that same quarter, underscores the speculative premium embedded in these stocks.

Tom Hollick, CEO of Strategy Asset Managers, describes current valuations as too disconnected from reality for long-term investors, adding that there's no ceiling to how high retail speculators can push a stock in the intermediate term. None of the pure-play quantum computing companies has achieved profitability. IonQ once targeted profitability by 2030, but this timeline hasn't been reaffirmed since installing a new CEO. RGTI has made no profitability commitment whatsoever.

The optimism persists because the potential market is enormous. Bank of America describes the powerful qubits this technology seeks to create as possibly the greatest revolution for humanity since the discovery of fire, envisioning a $2 trillion market by the middle of the next decade spanning applications from encryption to deep learning and real-time big data analysis. McKinsey offers a more conservative projection of $28 billion to $72 billion by 2035.

The massive gap between forecasts, ranging from $28 billion to $2 trillion, and the fact that even the nearest date sits a full decade away, raises serious questions about holding stocks trading at extreme valuations relative to current sales. The technology still faces fundamental challenges, particularly qubit sensitivity to environmental noise or atomic-level disturbances that cause errors. Broader deployment is expected by decade's end, with companies like IBM planning to release error-resistant systems capable of detecting and correcting mistakes on the fly.

Whether RGTI represents a bubble depends entirely on perspective. Measured against current revenues versus market cap, the valuation looks insane. Viewed through the lens of technological potential and future market size, it resembles a calculated bet on revolutionary technology. Rigetti raised $350 million in June and now holds $575 million in cash, which Williams says provides an extensive runway for funding research and development roadmaps through expected commercialization timelines.

The company delivered on its promise when its 36-qubit multi-chip quantum computer became available for general use in August, meeting its mid-2025 target. Williams notes that while individual milestones appear modest in isolation, the steady pace of progress across hardware sales expansion, customer acquisition, strategic purchases, and technological breakthroughs tends to strengthen investor confidence. The sector is transforming, business models are maturing, and this provides optimism that commercialization is closer than anticipated.

There's an old Wall Street saying that when your taxi driver starts recommending a particular stock, it might be time to sell. Quantum computing sits precisely at that moment, with everyone from sophisticated investors to daily speculators talking about it. Whether current prices reflect a bubble ready to burst will become clear in coming months and years as these companies either convert technological promises into commercial products generating real revenue or fail to deliver on the extraordinary expectations now priced into RGTI and its peers.

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