RGTI - Mid Q update - JPM endorses quantum. Will it impact RGTI? Bull case $150. Bear case $5

Cheat Sheets

October 16, 2025

Rigetti Computing Investment Report - Mid-Q4 2025: Stock Surges 6,530% in 12 Months on Quantum Hype

RIGETTI COMPUTING INC. (RGTI)

🔬 Quantum Pioneer | Stock +6,530% in 12 Months | $571M Cash War Chest | 36-Qubit Multi-Chip System Live

Mid-Q4 2025: JPMorgan $10B Investment Catalyst | $5.7M Orders + $5.8M AFRL Contract | 99.5% Gate Fidelity | Revenue $1.8M Q2

💰 Market Cap: $17.8B | 🏢 Employees: 140 | 🔬 FAB-1 Quantum Foundry | 9-Qubit Novera QPUs
👨‍💼 CEO Dr. Subodh Kulkarni | 🎯 Quantum Cloud Services | 💎 12 Years Old (Founded 2013)
$49.29
📉 -$7.05 (-12.5%) Today
+6,000%+ Past 12 Months
Price Target Scenarios

18-Month Horizon (Mid-2027 Targets) - Based on Current Price $49.29

$150.00
Bull Case (+204%)
Quantum Breakthrough
Commercial Revenue Explosion
📊 Valuation:
2027E Revenue: $150M × 100x P/S = $150/share (speculative quantum premium)
🚀 What's Needed:
Quantum advantage demonstrated in real applications • Commercial revenue accelerates to $100M+ annually • Government contracts expand 10x+ from current levels • 100+ qubit systems with 99.9%+ fidelity achieved • Major enterprises adopt QCaaS platform at scale • Partnerships with Microsoft Azure, AWS, Google Cloud materialize • Tech giants acquire stakes or full buyout rumors • Quantum computing market reaches $10B+ TAM early • FAB-1 foundry becomes profit center licensing to competitors • Market rerates quantum stocks to AI-level multiples • Profitability path becomes clear within 3-5 years
$85.00
Base Case (+72%)
Steady R&D Progress
Sector Momentum Continues
📊 Valuation:
2027E Revenue: $50M × 100x P/S = $85/share (quantum sector premium sustained)
⚖️ What's Needed:
Quantum computing maintains Wall Street interest with steady news flow • Annual revenue grows to $40-60M through government and research contracts • Cepheus-1 and Ankaa systems gain adoption in 20+ research institutions • Technical milestones hit on schedule with incremental progress • Multiple partnerships announced with Fortune 500 companies for pilots • $571M cash sustains operations through 2029 without heavy dilution • Competition remains but RGTI holds #3 position behind IonQ, D-Wave • Market maintains 80-150x P/S multiples for quantum leaders • Sector avoids major "quantum winter" narrative • Path to commercialization by 2028-2030 remains credible • Defense spending on quantum increases with bipartisan support
$5.00
Bear Case (-90%)
Quantum Bubble Bursts
Tech Doesn't Scale
📊 Valuation:
2027E Revenue: $10M × 5x P/S = $5/share (bubble collapse valuation)
🔻 What Could Go Wrong:
Jensen Huang's "20 years away" warning proves accurate • Quantum winter arrives as hype collapses (like AI winter 1980s) • Revenue stays stuck at $10-20M annually with no growth path • Technical challenges prove insurmountable - can't scale beyond 100 qubits • Error correction remains unsolved problem for decade+ • Cash burn accelerates forcing massive dilution or bankruptcy • Nvidia, Google, IBM quantum efforts make startups obsolete • Government funding dries up in recession • Short sellers like Martin Shkreli proven right • Stock reverts to $1-10 range like 2023 lows • Analyst targets of $27.80 average imply -50% downside from here • P/S multiple compresses to 5-20x as quantum bubble deflates
Bottom Line for Retail Investors
🚀
Explosive 6,530% Rally - JPMorgan Catalyst
Stock surged from $0.80 (52-week low) to $58.15 (all-time high Oct 10). Now at $49.29 after -12.5% pullback today. Still up 6,000%+ in past year, +185% past month at peak. JPMorgan's $10B "Security and Resiliency Initiative" targeting quantum computing sent entire sector soaring Oct 13. Current market cap $16.0B. Trading volume exploded to hundreds of millions of shares. Retail investors treating it like "next GameStop" - even got added to meme stock ETF. Citron Research, Shkreli shorting hard. Volatility extreme - can swing 20%+ in single day. This is pure momentum and hype, not fundamentals.
⚠️
Revenue $1.8M with $17.8B Valuation = INSANE
Q2 2025 revenue: $1.8M (down 42% YoY from $3M). H1 2025: $3.2M vs $6.1M prior year. Full year 2024: $10.8M total. Operating loss Q2: $19.9M. Net loss: $39.7M. EPS: -$0.05. At $16.0B market cap with $8M annual revenue = P/S ratio of 2,000x vs S&P 500 average of 3.3x. Analyst average price target $27.80 = -44% downside from current price! Stock trading on "future potential" not current business. Motley Fool: "might be decade away from profitability."
💎
$571M Cash + Recent Wins = Runway to 2028+
Raised $350M in June 2025 stock offering. Zero debt. Total cash/investments $571M = covers burn rate for 3+ years. Sept 30: $5.7M purchase orders for two 9-qubit Novera systems (Asian tech firm + CA AI startup), delivery H1 2026. Sept 18: $5.8M AFRL 3-year contract with QphoX for quantum networking. Aug: Launched 36-qubit Cepheus-1 multi-chip system, 99.5% two-qubit fidelity. Partnerships: India's C-DAC, Montana State, Quanta Computer Taiwan. Microsoft Azure integration coming. CEO: "4-5 years from real commercial value."
🎰
This Is Pure Speculation - Not Investment
Nvidia CEO Jensen Huang March 2025: "20 years for useful quantum computers" and surprised quantum stocks even publicly traded (later retracted after quantum sell-off). Barron's Oct 8: "quantum stocks may form market bubble." Analysts divided: all rate "Strong Buy" but average target $27.80 vs current $56 = expects -50% drop. Benchmark $50 target, B. Riley $35, but most targets $12-20 range. Motley Fool: "high P/S ratio adds uncertainty to already risky investment." This is momentum trading, not value investing. One bad quarter = stock crashes 50%+. Not for risk-averse.

📊 What's Happening Now: Mid-Q4 2025 Momentum & Recent Catalysts

Stock +25% Oct 13 on JPMorgan News • +185% Past Month • 6,530% Past Year • $5.7M Orders + $5.8M AFRL Contract Sept • 36-Qubit Cepheus-1 Launched Aug • $350M Capital Raise June • 99.5% Gate Fidelity Achieved • Microsoft Azure Integration Coming • Revenue -42% YoY to $1.8M Q2 • Loss -$39.7M Q2 • $571M Cash War Chest • Zero Debt • Analyst Target $27.80 (vs $56 current) 💪

💰
$16.0B
Market Cap
+2,900% YoY
⚡
$571M
Cash + Investments
Zero Debt
🎯
$1.8M
Q2 Revenue
-42% YoY
🚀
99.5%
Gate Fidelity
36-Qubit System

📞 Key Mid-Q4 2025 Developments & News Highlights

🎊
JPMorgan $10B Initiative - Oct 13 Explosion
JPMorgan announced $10B "Security and Resiliency Initiative" targeting 27 industries including quantum computing. Stock surged 25% on Oct 13 to $54.91 (closed), briefly hit $58.15 intraday (all-time high). Entire quantum sector rallied: D-Wave +20%, IonQ similar. Signals institutional confidence in quantum commercialization. Trefis: "JPMorgan catalyst is real... further gains plausible." Stock now up 185% in past month, 127% YTD through early Oct.
💼
$5.7M Orders + $5.8M AFRL - Sept Wins
Sept 30: Secured $5.7M purchase orders for two 9-qubit Novera quantum systems. One from large Asian tech firm, one from California AI startup. Delivery H1 2026. Sept 18: Awarded $5.8M 3-year AFRL contract with QphoX to advance superconducting quantum networking. These deals = proof of concept demand but tiny compared to $17.8B valuation. Still mostly R&D/research sales, not commercial revenue.
🔬
36-Qubit Cepheus-1 Launched - 99.5% Fidelity
August 2025: Announced general availability of 36-qubit multi-chip Cepheus-1 system. Four 9-qubit chiplets achieving 99.5% two-qubit gate fidelity. Halved error rate from prior generation. Accessible via Rigetti Quantum Cloud Services, Microsoft Azure integration coming. CEO: "Demonstrates scalable path to 100+ qubit systems with quantum advantage." Benchmark analyst: this milestone drove $50 price target raise. Critics say still years from practical applications.
💸
$350M Capital Raise - Cash to 2028+
June 2025: Completed $350M stock offering. Combined with existing cash = $571M war chest with zero debt. At ~$20M quarterly burn rate = runway through 2028+. Avoids bankruptcy risk short-term. BUT means massive dilution for shareholders. CEO Kulkarni exercised 1M options and immediately sold in May = concerning insider signal. Stock raises happening because revenue can't sustain operations.

📍 CEO Quote: "We are four to five years from real commercial value of quantum computing." - Dr. Subodh Kulkarni (not getting rich quick)

🎯 Technology Edge: FAB-1 quantum foundry in Fremont, CA = world's first dedicated quantum foundry (2017). Vertically integrated = design + build own chips. Superconducting approach vs IonQ trapped-ion, D-Wave annealing. Positioning as "Nvidia of quantum."

⚠️ Revenue Reality: Q2 2025 revenue $1.8M down from $3M prior year = -42%. H1 2025 $3.2M vs $6.1M = -47%. 2024 full year $10.8M down 10% from 2023. "Choppiness" and "declining revenue streams" per analysts. Still experimental/research phase.

🔮 Analyst Warning: Average price target $27.80 = -50% from current $56. Highest target $50 (Benchmark), lowest $18. Median implies stock got way ahead of itself. Barron's: "quantum bubble." Deutsche Bank had $1.50 target in 2023 when stock traded there.

🚀 Why RGTI Bulls Are Right
🌊
Quantum = Next AI - $100B Market by 2035
McKinsey predicts quantum computing could be $100B industry within decade. Revolutionary potential in drug discovery, cryptography, optimization, materials science, financial modeling. Just like AI skeptics in 2010s, quantum skeptics may be proven wrong. Google, IBM, Microsoft, Amazon all investing billions. If quantum delivers on promise, early movers like RGTI could be next NVIDIA. Being in Fremont near Silicon Valley = access to talent and capital. FAB-1 foundry gives vertical integration advantage competitors lack.
💰
$571M Cash = No Bankruptcy Risk Till 2028+
Unlike many speculative tech stocks, RGTI has massive cash cushion. $571M with zero debt = at least 3 years of runway even if revenue stays at $10M/year. Time to hit milestones and prove technology. June $350M raise at higher prices = smart capital management. Can survive quantum winter if it comes. Government contracts provide steady baseline ($5.8M AFRL just first of many potential). Defense/intelligence applications could drive procurement before commercial adoption. Not going bankrupt anytime soon.
🔬
Technical Milestones = Real Progress Not Vaporware
99.5% gate fidelity on multi-chip 36-qubit system = legitimate achievement. Halving error rates = exponential progress path. Cepheus-1 demonstrates chiplet architecture can scale beyond single-chip limitations. Partnerships with Quanta Computer, Montana State, India C-DAC show ecosystem building. Microsoft Azure integration brings enterprise distribution. 84-qubit Ankaa-3 system already demonstrated. Roadmap to 100+ qubits with error correction visible. Unlike vaporware companies, RGTI shipping actual hardware to real customers. Technology risk decreasing with each milestone.
📈
Momentum + Retail Army = Self-Fulfilling Prophecy
6,530% gain in 12 months speaks for itself. Added to meme stock ETF by Roundhill = institutional validation of retail interest. Social media buzz creating FOMO buying. JPMorgan $10B news shows Wall Street taking quantum seriously. Every analyst rates "Strong Buy" even if targets lower. Short squeeze potential against Shkreli and Citron. Retail investors learned from GameStop, AMC = can move stocks regardless of fundamentals. If momentum continues, stock could hit $100+ on pure speculation before fundamentals matter. Early buyers already made fortunes, FOMO could drive more.
🐻 Why RGTI Bears Have Valid Concerns
💸
$17.8B Valuation on $8M Revenue = 1,100x P/S
This is absolute insanity. $1.8M quarterly revenue × 4 = ~$8M annual revenue (being generous since revenue declining). Market cap $16.0B ÷ $8M = Price-to-Sales of 2,000x. Even at $10.8M 2024 revenue = 1,480x P/S. S&P 500 average is 3.3x. Even high-growth SaaS trades 10-30x. NVIDIA at peak AI hype traded 40x. This valuation only makes sense if revenue grows 100x in next 3-5 years. No path visible to that. Already down 15% from $58 highs. One more bad quarter and stock crashes to $20-30 range.
⏰
CEO Says "4-5 Years" But Huang Says "20 Years"
Own CEO admits 4-5 years from commercial value minimum. NVIDIA CEO Jensen Huang (March 2025): "20 years for useful quantum computers" and surprised quantum companies publicly traded. He retracted after quantum stocks crashed but damage done. If Huang is right, RGTI is 2 decades from profitability. Current shareholders face massive dilution through multiple capital raises. Operating losses $20M/quarter = $80M/year burn. Even with $571M cash, need more money in 2028. Stock will be $1-5 if quantum doesn't deliver by 2027-2028.
📉
Revenue DECLINING Not Growing - Down 42% YoY
Q2 2025 revenue $1.8M down from $3M prior year. H1 2025 $3.2M vs $6.1M = -47%. 2024 $10.8M vs 2023 $12M = -10%. Revenue should be growing 50-100% annually at this stage but it's shrinking! Contract revenue lumpy and unpredictable. No recurring revenue model. Each deal one-off. $5.7M orders announced Sept are for H1 2026 delivery = won't show in financials for 6+ months. By time they do, stock could be at $10. Declining revenue with rising valuation = textbook bubble.
🎯
Analyst Target $27.80 = -50% Downside Right Now
7 analysts covering, average 12-month target $27.80. Current price $49.29 = analysts expect -44% drop. Highest target $50 (Benchmark) barely above current. Most targets $18-35 range. TipRanks consensus: "Strong Buy" rating but price target implies major downside = disconnect. Barron's Oct 8: "quantum stocks may form market bubble." Motley Fool: "expensive shares... might be decade away from profitability... early to party." Stock already crashed from $58 to $49 = -15% pullback from highs. Momentum stocks can reverse violently. GameStop went from $483 to $40 in weeks. Today's -12.5% could be start of bigger correction.

This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial advisor before making investment decisions.