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Rigetti Computing (RGTI) stock rocketed 30% on July 16 after the quantum computing company announced achieving 99.5% median two-qubit gate fidelity on its modular 36-qubit system, marking an important step toward commercial viability in the emerging quantum industry.
The Berkeley-based company’s breakthrough represents a 2x reduction in error rates compared to its previous best results, bringing quantum computing closer to practical applications that could generate meaningful revenue.
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The achievement hinges on Rigetti’s proprietary modular chip technology, which combines four 9-qubit “chiplets” to create a 36-qubit system. This approach leverages semiconductor industry techniques to enable scaling while maintaining high performance, a critical challenge in quantum computing where error rates typically increase with system size.
“We benefit from the many advantages of superconducting qubits, including gate speeds more than 1,000x faster than other modalities like ion trap and pure atoms, and scalability,” CEO Subodh Kulkarni explained.
Unlike competitors using trapped ions or atoms, Rigetti’s superconducting qubits operate at extremely low temperatures, which reduces electrical resistance and enables them to maintain quantum states for longer periods.
The timing appears favorable for quantum investments, with the sector gaining momentum as companies move from research to commercial applications. Rigetti plans to launch its 36-qubit system on Aug. 15 and deliver a system with over 100 qubits by year-end 2025.
However, investors should exercise caution. Rigetti has reported year-over-year revenue declines for four consecutive quarters, with Q2 expectations calling for adjusted losses of $0.04 per share on $1.87 million revenue. While the technical milestone is impressive, the company must still demonstrate its ability to monetize quantum supremacy.
In Q1 2025, Rigetti Computing reported revenue of $1.5 million, down over 50% from $3.1 million in the year-ago period. While investors were worried about the decline in sales, the quantum computing pioneer secured several strategic wins that could accelerate its path to commercial viability.
Rigetti was selected for DARPA’s prestigious quantum benchmarking initiative, advancing to Stage A with a $1 million award. Kulkarni emphasized the program’s significance, noting that DARPA chose only 15 companies from over 100 applicants to develop “utility-scale quantum computing” within seven years. Rigetti’s proposal combines its proprietary multichip architecture with quantum error correction codes, targeting systems with over 10,000 qubits and a gate fidelity of 99.9%.
Rigetti also secured a $5.48 million Air Force consortium award to advance its breakthrough ABAA chip fabrication technology, which improves qubit frequency targeting by a factor of 10. It received three UK Innovate awards to collaborate on quantum error correction with the National Quantum Computing Center, including upgrading their existing system to 36 qubits.
Moreover, Quanta committed $250 million over five years for the development of non-QPU hardware, including control systems and manufacturing components.
This partnership enables Rigetti to focus its resources on core QPU technology while leveraging Quanta’s expertise in high-volume manufacturing.
Kulkarni reaffirmed the company’s chiplet roadmap, targeting 36 qubits at 99.5% fidelity by mid-2025 and over 100 qubits by year-end. He emphasized chiplets as the only viable path to scale superconducting quantum computers, noting competitors’ struggles with larger monolithic chips.
While revenue remains lumpy due to the industry’s R&D phase, Rigetti’s strategic partnerships and technical progress position it well for the transition to commercial quantum computing expected in 3-5 years. The DARPA selection particularly validates its technology approach against major competitors, such as International Business Machines (IBM).
Analysts tracking RGTI stock anticipate sales to increase from $10.8 million in 2024 to $150 million by 2029. Comparatively, losses per share are forecast to narrow from $0.29 in 2024 to $0.16 in 2028.
Out of the six analysts covering RGTI stock, five recommend “Strong Buy” and one recommends “Moderate Buy”. The average RGTI stock price target is $14.83, below the current price.
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On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
