Original Coverage & Source Attribution: www.theglobeandmail.com
Shares of Rigetti Computing(NASDAQ: RGTI) slipped 23.4% last month, according to data from S&P Global Market Intelligence. The quantum computing stock that was a market darling in 2025 is now down 80% from its highs as investors flee from the thematic trade. As of last quarter, Rigetti was generating minimal revenue and is experiencing significant cash burn.
Here’s why the stock was down last month, and whether now looks like a good time to buy the dip.
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Quantum computing is losing steam
There was not much official news from Rigetti Computing last month. However, there was a general deflation of the quantum computing trade among investors, with competing firm IonQ announcing a dilutive acquisition in an all-stock deal.
Last quarter, Rigetti’s actual business generated $5 million in revenue and had an operating loss of $28 million. That is the general state of the quantum computing market today, with the technology at such a nascent point that it is more of a science project for customers than a commercially viable business model.
Rigetti’s free cash flow has dipped to a loss of $88 million over the last twelve months, and continues to worsen quarter-by-quarter. With $366 million in cash on the balance sheet and no clear path to making quantum computing a viable business, the company will likely need to raise capital within the next few years, especially if cash burn worsens.
Time to buy the dip on Rigetti Computing stock?
At a market cap of $3.7 billion today, you might think that Rigetti Computing is a cheap stock for betting on the future of quantum computing technology.
The problem is, quantum computing has shown for decades that it is difficult to bring any commercially viable product to market. Right now, Rigetti trades at a price-to-sales ratio (P/S) of 275, which is wildly expensive. It is not profitable and is burning a bunch of cash. Plus, management keeps diluting shareholders, with shares outstanding up 674% over the last five years. This is going to be a massive headwind for shareholders who buy today, as this dilution is likely to continue.
Thematic investments in futuristic technologies may sound exciting, but they typically deliver suboptimal investment results. We are seeing the same scenario playing out for Rigetti Computing and other quantum stocks. With little revenue and no path to profitability, Rigetti is likely to continue to dip over the next few years.
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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends IonQ. The Motley Fool has a disclosure policy.
