Every few decades, a new technology hits the scene, transforming the way people live and creating billions — if not trillions — in shareholder value. Most recently, this has included generative artificial intelligence (AI) and the internet. Some analysts believe quantum computing could be the next big leap, putting early movers like Rigetti Computing (NASDAQ: RGTI) in a position to benefit substantially over the long term.
That said, it remains unclear how the quantum story will play out over the next five years — or if Rigetti’s deeply unprofitable business will even last that long. Let’s dig deeper to find out what the future might hold.
Quantum computing is a field of computer science and physics that aims to dramatically increase computational power by replacing traditional bits (which can only represent one of two states) with quantum bits or qubits, which can exist in multiple states simultaneously. If it works, it could set the stage for devices capable of solving the most challenging problems millions of times faster than today’s strongest supercomputers.
This technology will have massive financial implications in drug discovery, materials science, and logistics. Analysts are hugely optimistic. McKinsey & Company estimates that capable quantum systems could be available as soon as 2030, with the market being worth a respectable $100 billion in a decade (up from $4 billion in 2024). Rigetti Computing is trying to get in on the ground floor of this long-term opportunity.
Founded in 2013, Rigetti Computing is a mid-cap tech company specializing in designing and building quantum computing hardware (chips and processors). It takes things a step further through its Quantum Cloud Services (QCS) platform, which aims to allow clients to access this processing power remotely with their classical computer systems.
If things go well, Rigetti can position itself to potentially become the Nvidia of quantum computing — providing the infrastructure other companies will need to create value for their businesses. However, first-quarter earnings suggest meaningful commercialization is still far away.
Revenue declined 52% year over year to $1.5 million. And this trend is mainly because Rigetti is currently dealing with “lumpy” revenue streams like one-off government or academic contracts instead of sustained commercial subscriptions. Operating losses jumped from $16.6 million to $21.6 million, and most of this is coming from research and development (R&D) spending that it probably can’t reduce without risking its competitiveness.
