RGTI

Executive Summary

A cash-rich chiplet pure-play, still priced for perfection on a $13M revenue base

Rigetti Computing (RGTI) is now selling hardware rather than just cloud time. Q2'26 revenue reached $5.14M, up 185% YoY, driven by on-prem Novera QPU sales, and gross margin rose to ~43% from ~31%. The balance sheet is the floor: $541M of cash and investments, no debt, plus a definitive $100M Commerce Department CHIPS award ($43.9M up front) signed in September. The problems are execution and price. The 108-qubit Cepheus-1 system sits at a 99.1% median two-qubit fidelity versus a 99.5% year-end target, and the 1,000-qubit goal has been restated as '~3 years'. At $11.80 the stock still trades at ~250× EV/TTM revenue and ~77× 2027 consensus revenue, roughly double IonQ's forward multiple. The CHIPS deal also added 7.7M shares, and short interest is ~20% of shares. After a 75% drawdown and RSI near 29 the stock is oversold, but our probability-weighted value is ~$12. We initiate at HOLD with a $12 target and Low conviction: no reason to sell at cash-supported, washed-out levels, and no edge to buy before the Q3 print and the fidelity milestone.

Key Metrics

Strong balance sheet, tiny revenue base — Q2'26 (quarter ended Jun 30, 2026) unless noted · price $11.80 as of Oct 16, 2026

Cash + investments

$541.3M

Jun 30, 2026 · no debt · plus $43.9M first CHIPS tranche (Q3)

Revenue growth

+185%

Q2'26 $5.14M vs Q2'25 $1.80M (SEC EDGAR)

Gross margin

42.6%

GP $2.19M / rev $5.14M (vs ~31% in Q2'25)

Operating expenses

$30.3M

R&D $20.7M · SG&A $9.5M · +48% YoY

Operating loss

−$28.1M

GAAP net −$52.6M incl. $29.6M warrant charge · GAAP EPS −$0.16

Operating cash burn

~$16M/qtr

H1'26 operating cash used $32.0M (excl. capex)

EV / TTM revenue

~253×

$3.9B cap − $541M cash over $13.3M TTM revenue · ~77× FY27E

2Q gate fidelity

99.1%

108Q median · 99.5% target by late 2026

Quarterly Revenue — SEC EDGAR (10-Q / 10-K)

$1.95M

Q3 FY25

$1.87M

Q4 FY25

$4.40M

Q1 FY26

$5.14M

Q2 FY26

Growth Story

Early hardware sales are real, but the scale-up roadmap still has to be delivered

+185%

Q2'26 revenue growth YoY

$5.14M vs $1.80M; on-prem Novera QPU sales were ~$4.1M of the quarter

$100M

Commerce CHIPS R&D award

Definitive Sep 2026: $43.9M up front, $29.9M + $26.2M on milestones; 7.74M shares to the government at $12.92 (8-K)

99.1%

Median 2Q fidelity, 108Q

Cepheus-1-108Q (GA since Apr 2026); 99.5% targeted by year-end; 99.8% on 9Q

SEP 8, 2026

Commerce CHIPS agreement signed

$100M R&D award for readout electronics, cryogenics and fab. $43.9M available now; two milestone tranches follow. The government receives 7,739,938 shares (~2.3%).

NOV 10, 2026 (EST.)

Q3 2026 earnings

Not yet confirmed. Watch Novera order flow, gross margin near 43%, the first CHIPS tranche in cash, and opex growth. Consensus FY26 revenue ($23.3M) implies ~$13.7M in H2.

Q4 2026

108Q at 99.5% fidelity

Company target to lift Cepheus-1-108Q median two-qubit fidelity from 99.1% to 99.5%. A miss would repeat the earlier 108Q delay.

LATE 2026

Roadmap reset

Management promised an updated technology roadmap. The Q3'25 targets (150+ qubits by end-2026, 1,000+ by end-2027) are absent from Q2'26 materials.

~2029

1,000 qubits · 99.9% · <50 ns

Rigetti's ~3-year target for quantum advantage. IBM targets its fault-tolerant Starling system for the same year.

Earnings & Signals

Forward Estimates, Surprises & Insider Activity

Forward Earnings Estimates

FY+1 EPS ConsensusFY26E −$0.19 (non-GAAP; range −$0.16 to −$0.22) · revenue $23.3M (+228%)

FY+2 EPS ConsensusFY27E −$0.21 (non-GAAP) · revenue $43.9M (+89%)

PEG Ration/m (loss-making)

Forward P/En/m (negative EPS)

EPS Revisions (90d)↑n/a ↓n/a (Stabilizing — Zacks moved RGTI from Strong Sell to Hold (#3) on Oct 6, 2026; no broker PT changes since Aug 7)

Guidance AccuracyNo financial guidance. Revenue missed consensus in Q3'25 and Q4'25, then beat in Q1'26 and Q2'26 as on-prem system sales were recognized. Revenue stays lumpy.

Earnings Surprise Track Record

Q2 2026 Est: −$0.05 Act: −$0.05 0%

Q1 2026 Est: −$0.05 Act: −$0.04 +20%

Q4 2025 Est: −$0.05 Act: −$0.03 +40%

Q3 2025 Est: −$0.05 Act: −$0.03 +40%

Beat RateAdjusted EPS 3 of 4 beats, 1 in line · revenue 2 of 4 beats. Note: GAAP diluted EPS (SEC EDGAR) is far worse (Q2'26 −$0.16) because of non-cash warrant fair-value charges.

Insider Activity (90 Days)

Net Buying/SellingNet seller: ~163.7K shares / ~$2.57M sold, zero buys (MarketBeat, 3 months to Oct 8, 2026)

Sell/Buy RatioAll sells / 0 buys

Negative but routine. Sales are 10b5-1 or tax-withholding driven around option exercises struck at ~$1, but no insider bought into a 75% drawdown. Insiders own only ~1.6%.

CEO Subodh Kulkarni exercised 150K options and sold 120K shares at $15.68 on Sep 9, 2026 (10b5-1 plan adopted Jun 10) and now holds ~140K shares directly. COO David Rivas sold 9,038 shares at $16.79 on Aug 20 (tax withholding).

Peer Comparison

Relative Valuation vs. Competitors

Company	P/E (fwd)	EV/Rev	Rev Growth	Gross Margin
Rigetti Computing	n/m	~253× TTM · ~77× FY27E	+185% (Q2 YoY)	42.6%
IonQ	n/m	~30–35× FY26 guide (est.)	+287% (Q2 YoY, incl. M&A)	~25% (3rd-party est.)
D-Wave Quantum	n/m	~320× H1 run-rate (est.)	~flat (Q2 $3.08M)	55.4%
Quantum Computing Inc	n/m	n/v	Q2 $5.6M vs $61K	negative
IBM	~19–27× (sources conflict)	n/v	+1% (Q2 YoY)	57.7%

Every pure-play loses money, so P/E is meaningless. IonQ is the scale leader (FY26 guide $280–290M, multibillion cash) at roughly a third of Rigetti's revenue multiple on our estimate (IonQ $31.28 on Oct 16; cap scaled from Sep 8 plus its $2B October raise). D-Wave is pricier on run-rate revenue but has a stronger gross margin. IBM is the main superconducting incumbent. Peer EV figures are our estimates from scaled prices, not reported values.

Valuation

Price Targets & Scenarios

Scenario	Price Target	Assumptions	Probability
Fidelity Hit + Sector Re-rates	$24	108Q reaches 99.5% on schedule, the roadmap reset keeps a credible 2027–28 path, and Novera/Cepheus orders lift FY27 revenue to ~$60M (above $43.9M consensus). Quantum sentiment recovers and the stock re-rates to ~130× FY27 revenue (EV ≈ $7.8B) plus ~$0.5B net cash on ~345M shares ≈ $24, still half the 52w high.	20%
Lumpy Progress, Multiple Holds	$11	FY27 revenue lands near the $43.9M consensus. Fidelity improves but slips into 2027, and the sector stays range-bound after IonQ's dilution. ~75× FY27E revenue (EV ≈ $3.3B) plus ~$0.5B cash over ~345M shares ≈ $11.	45%
Roadmap Slip + Dilution	$6	The roadmap update pushes scale targets out again, Q3/Q4 system revenue disappoints, and management resumes ATM issuance to fund the fab. The multiple compresses toward ~35× FY27E (a discount to IonQ). EV ≈ $1.5B plus ~$0.5B cash over ~350M shares ≈ $6.	35%

Probability-Weighted Target: $11.85 (≈ +0% vs $11.80 — a fair price with wide tails; rounded PT $12)

$11.85

Weighted

Bull $2420%

Base $1145%

Bear $635%

Analyst Consensus

Rosenblatt Securities

$40

Reiterated Buy — Aug 7, 2026 (post-Q2)

Wedbush

$40

Initiated Outperform — Aug 3, 2026

Benchmark

$25

Buy — Jul 27, 2026 (cut $35→$25 in Mar 2026)

Jefferies

$18

Reiterated Hold (Street low) — Aug 7, 2026

7 Buy · 5 Hold · 1 Sell — MarketBeat consensus is Hold on 13 ratings with an average target of $30.67 (range $18–$40). No broker has moved a target since Aug 7, so the Street average predates most of the ~60% slide and is stale.

Technical

Key Levels & Options Intelligence

S/RSupport & Resistance

52-Week High

$47.78

200-Day MA

$17.82

50-Day MA

$15.76

Early-Oct breakdown zone

$14.14–$14.59

Commerce issue price

$12.92

Current Price

$11.80

52-Week Low · Quanta cost ~$11.59

$11.11

OptOptions & Sentiment

Short interest: 65.7M shares (Sep 30, 2026), up from 58.9M
Short % of shares out: ~19.7% (Sep 30, 2026)
Days to cover: 3.9 (Sep 30), up from 2.8 in Jul
ATM implied vol: ~120% (Aug 4, 2026; no Oct read)
20-day historical vol: ~101% (Aug 4, 2026)
Put/call (OI): 0.90 (May 2026, stale)
Beta: 2.02
Avg daily volume: ~29.6M shares

Conviction Analysis

Systematic Conviction Score: 33/100 (Low)

Analyst Alignment

30%

FCF Visibility

25%

Catalyst Clarity

20%

Valuation Safety

15%

Mgmt Quality

10%

Weighted 0.30/0.25/0.20/0.15/0.10, the score is 33 (Low). Analyst alignment is middling: consensus Hold, with a $30.67 average target set before the slide. FCF visibility is poor: ~$30M quarterly opex against ~$5M revenue and a likely $300M+ fab need by 2028. Catalysts are defined but binary (Q3 print, 99.5% fidelity, CHIPS milestone tranches). Valuation offers little safety: cash is ~14% of market cap. Management secured non-dilutive-leaning federal funding and a large cash pile but missed the earlier scale targets and only sells stock.

Risk & Ownership

Risk Assessment & Insider Signals

OOwnership & Insider Signals

Institutional ~35%: MarketBeat shows 35.4% institutional ownership (Oct 8, 2026). Other aggregators show up to ~44%.
Top holders: BlackRock, Vanguard: BlackRock held 28.5M shares (~8.5%) at Jun 30, 2026 and added to it. Vanguard entities held ~34M shares across Q1'26 13Fs.
Insiders ~1.6%: After the Sep 9 sale, the CEO holds ~140K shares directly. Management has little open-market skin in the game.
Retail-dominated float: Roughly 60%+ of shares sit outside institutions and insiders (our estimate), consistent with ~100%+ implied vol and ~20% short interest.
Strategic: Quanta Computer: Quanta (2382.TW) bought ~$35M of stock at ~$11.59 in Apr 2025, alongside a five-year superconducting collaboration. Its cost basis sits right at today's price.
Strategic: U.S. Department of Commerce: 7,739,938 shares (~2.3%) at $12.92 under the CHIPS award (8-K, Sep 2026). Non-voting except on mergers. The company can repurchase shares tied to undisbursed tranches for $1.

Risk Heatmap

Quantified Risk Assessment

Severity Risk Factor Prob. PT Impact

High Continuous equity dilution

The $350M 2025 ATM is complete and ~$100M more was reportedly raised by ATM in 2026. The CHIPS deal issues 7.74M shares at $12.92, and 24.6M more are reserved. IonQ's $2B October raise shows how the sector funds itself.

70% -15%

High Valuation detached from revenue

~$3.9B market cap on ~$13.3M TTM revenue (~290× sales). Even after the −75% drawdown, the price assumes roadmap success.

50% -30%

High Roadmap / technical execution

108Q fidelity is 99.1% vs a 99.5% year-end target. The 1,000-qubit goal moved from end-2027 to '~3 years', and Rigetti was not selected for DARPA QBI Stage B. Trapped-ion rivals and IBM compete for the same narrative.

35% -25%

Medium Rising burn and fab capex

Q2 opex rose 48% YoY to $30.3M. TD Cowen flagged a $300M+ new-fab need by 2028 against a $70–80M annual burn.

40% -12%

Medium Lumpy, government-dependent revenue

Revenue hinges on individual system deliveries (Novera, C-DAC India) and Commerce milestone tranches ($29.9M / $26.2M) released at the Department's discretion. Q3'25 and Q4'25 both missed.

45% -10%

Medium High-beta momentum unwind

Beta is 2.0 and the stock is down 21% in a month, below both MAs and only 6% above its 52w low. Short interest is ~20%. A break below $11.11 could trigger retail capitulation.

40% -15%

Recommendation

Summary

Rating

HOLD

Conviction

Low

Price Target

$12

Timeframe

12 mo

Upside

+2%

Position Size

0–1% — speculative only; do not add before Q3 print

Entry Strategy

Tranche 1 — 0% now

Hold / no new money at $11.80

No edge before the Q3 print (est. Nov 10). The stock is oversold (RSI 29) but below both MAs with ~20% short interest, and the Street targets are stale.

Tranche 2 — 40%

~$10.00 after Q3

Only if Q3 shows H2 revenue tracking the $23M FY26 consensus and gross margin ≥40%, without a new ATM. A ~15% further drawdown trims EV/FY27E to ~65×.

Tranche 3 — 60%

Reclaim of $15.76 50-DMA (after fidelity print)

Complete only after Rigetti reports 99.5% median 2Q fidelity on 108Q and the stock reclaims its 50-day average, confirming execution and a trend change.

1-Year Price & Key Levels