RGTI

Rigetti is the smaller, earlier version of the quantum bet. Last quarter it did $5.1 million in revenue — up 186% from a year ago, technically a beat, but that's the entire quarter. For comparison, IonQ did $80 million in the same three months, roughly sixteen times more. Rigetti lost $28.1 million at the operating level to generate that $5.1 million. The stock trades around $17, down about 24% this year, and it changes hands at something like 579 times sales. There's no way to make that valuation sound reasonable on current numbers, because it isn't based on current numbers. What Rigetti does have is time. It ended the quarter with $541.3 million in cash and no debt, which at the current burn rate buys several years of runway without needing to raise money — a genuinely important advantage in a field where the answer might be a decade away. It also has government interest: a letter of intent from the Commerce Department for up to $100 million in potential CHIPS Act funding, structured with an equity stake. Commercially, it's shifting from selling cloud access to delivering physical machines customers run themselves — a 9-qubit system to the Pittsburgh Supercomputing Center with HPE, and a 108-qubit system being built for India's national computing center. Universities and national labs want hardware on site, and Rigetti is leaning into that. If you want one number to actually track here, it isn't revenue. It's two-qubit gate fidelity — essentially, how often the machine performs an operation correctly. Rigetti is at 99.1% and has publicly committed to 99.5% by year end. That sounds like a rounding error and isn't: errors compound across thousands of operations, and the gap between 99.1% and 99.5% is roughly the difference between an interesting lab device and something that can run a useful calculation. The CEO's credibility is tied to it. Hitting it keeps the roadmap toward 1,000 qubits in about three years alive; missing it means the timeline stretches and the cash starts looking less comfortable. Two other things worth knowing: insiders sold roughly $17.5 million in shares last quarter across 33 transactions with net selling, and the stock has fallen after three of the last four earnings reports. This is the most speculative name we've written about — smaller than IonQ, further from revenue, better funded. Treat the position size accordingly. (written with the help of Claude)