Rigetti stock surges as Cantor Fitzgerald starts coverage with Overweight rating

In the United States on July 2, 2025, Rigetti Computing, a key player in the quantum computing sector, saw its stock price soar by 15%, contributing to the company’s almost 70% climb over the last four months. This notable increase can be attributed to Cantor Fitzgerald initiating coverage of Rigetti with an Overweight rating and setting a price target of $15. This price point indicates a potential further increase of approximately 19% from current levels. The surge in Rigetti's stock also coincided with a broader movement within the quantum computing industry, as companies like IONQ and D-Wave Quantum also reported significant gains amid rising expectations regarding Federal Reserve interest rate cuts and a new trade agreement between the U.S. and Vietnam, which enhanced investors' risk appetites. Despite this wave of positive momentum, it is important to recognize that Rigetti remains deeply entrenched in research and development. The company is preparing for future commercial applications, even as CEO Subodh Kulkarni has warned that substantial commercial demand is still three to five years away, with broader adoption potentially taking a full decade. Currently, the financial valuation of Rigetti appears noteworthy, trading at an astounding 478 times its expected sales for 2025. In the first quarter of 2025, the company faced a 50% year-over-year decline in revenue, posting only $1.5 million, while operating losses mounted to $21.6 million. Despite these financial challenges, Rigetti is well-supported financially with over $575 million in cash reserves, following a $350 million equity capital raise and a $250 million partnership with Quanta, placing the company in a stable position regarding its financial commitments. Rigetti’s strategy includes transitioning from single-chip systems to multi-chip modules to achieve more than 100 qubits in their machines, laying the groundwork for advanced designs like the 336-qubit Lyra projected for 2026. The company showcases an end-to-end approach that grants them greater flexibility in comparison to various competitors like IBM, IonQ, and Google. Additionally, partnerships with industry players like Quanta are expected to bolster Rigetti's commercialization efforts. However, it must also navigate increasing competition from developments such as Google's Willow chip and Amazon's Quantum Embark program, all while balancing the fine line between innovation and operational viability. In closing, Rigetti Computing is a compelling entity in the quantum computing landscape, demonstrating credible technology and strategic partnerships, despite facing the inherent risks tied to the volatile and evolving nature of cutting-edge technology investments.