Rigetti Computing’s (RGTI Quick QuoteRGTI - Free Report) second-quarter 2025 results painted a picture of a company balancing short-term revenue challenges with long-term promise. Revenue came in at $1.8 million, down from $3.1 million in the prior year. Gross margin also narrowed to 31% from 64%, reflecting lower-margin government contracts. Even so, Rigetti strengthened its position by raising $350 million through an equity offering, ending the quarter with a healthy $571.6 million in cash and no debt. That financial cushion gives the company flexibility to continue investing aggressively in research and development while weathering near-term losses.

On the innovation side, Rigetti continued to push boundaries. The company introduced Cepheus-1-36Q, the largest multichip quantum computer demonstrated to date, achieving a two-fold reduction in error rates compared with its earlier system. Management expressed confidence in delivering a 100-plus qubit chiplet-based system with 99.5% gate fidelity before year-end, underscoring its focus on scaling toward quantum advantage.

While peers such as Arqit Quantum (ARQQ Quick QuoteARQQ - Free Report) , D-Wave Quantum (QBTS Quick QuoteQBTS - Free Report) , and Quantum Computing Inc. (QUBT Quick QuoteQUBT - Free Report) pursue alternative paths ranging from quantum encryption to annealing and software-first solutions, Rigetti’s progress in superconducting qubits highlights a differentiated strategy aimed at building scalable, fault-tolerant hardware. For investors, the key will be monitoring Rigetti’s ability to sustain this technical momentum, the reauthorizing of the National Quantum Initiative and the company’s progress in converting its strong cash position into meaningful commercial traction over the next few years.

RGTI Shares Price Performance

Rigetti’s shares have held up better than some quantum peers in the year-to-date period, even as the sector remains volatile. RGTI stock has gained 9.1% so far this year. Shares of QUBT and ARQQ have lost 7.4% and 15.2%, respectively. By contrast, QBTS has surged 102.5% over the same timeframe.

The broader Zacks Internet - Software Industry has advanced 22.9%, showing that Rigetti continues to make steady progress while outpacing certain competitors.

Let’s delve deeper and determine the best course of action for your portfolio regarding the RGTI stock.

RGTI's Price Performance

Image Source: Zacks Investment Research

Developments Propelling Rigetti’s Growth

Breakthroughs in Chiplet-Based Architecture: Rigetti’s introduction of Cepheus-1-36Q, the industry’s largest multichip quantum computer, marked a key step toward scalability. The system achieved a two-fold reduction in error rates compared with its predecessor, Ankaa-3, with a median two-qubit gate fidelity of 99.5%. By leveraging chiplet technology, a proven approach in the semiconductor industry, Rigetti is improving manufacturing yields, reducing complexity, and paving the way for larger, more reliable quantum systems. Management remains confident of delivering a 100-plus qubit chiplet-based system before year-end, underscoring its leadership in superconducting qubits.

Strengthened Balance Sheet for Long-Term Execution: Alongside its technical milestones, Rigetti has reinforced its financial foundation with a significantly improved cash position and no debt obligations. This financial strength gives the company flexibility to keep funding its ambitious R&D roadmap, explore selective M&A opportunities, and invest in scaling operations as the quantum computing market matures. With funding risks largely off the table in the near term, management can maintain focus on execution, advancing its chiplet architecture, and accelerating progress toward quantum advantage over the next few years.

RGTI’s Sales & EPS Growth

In 2025, Rigetti is expected to experience a 19.7% decline in revenues. On the profitability front, earnings per share are expected to remain negative, but with an improvement of 86.1% year over year.

Image Source: Zacks Investment Research

A Key Challenge for RGTI

Revenue Dependence on Government Programs: Despite advancing its technology, Rigetti’s financial performance remains tied to government funding cycles. Second-quarter revenue fell significantly, primarily due to the expiration of the U.S. National Quantum Initiative, which is still awaiting reauthorization by Congress. While government contracts from the United States and U.K. provide important validation and cash flow, they also create variability in quarterly results and leave Rigetti vulnerable to policy delays. Sustaining long-term growth will require the company to broaden its revenue base beyond these contracts and convert its technological milestones into recurring commercial opportunities.

RGTI Shares Look Overvalued

Rigetti’s stock is not so cheap, as suggested by the Value Score of F.

RGTI is currently trading at a price-to-book (P/B) ratio of 8.74X, which is higher than the industry average of 7.08X.

RGTI's Price-to-Book Ratio

Image Source: Zacks Investment Research

How to Play Rigetti’s Stock Now?

While Rigetti is still working through modest revenues and ongoing operating losses, its strong cash position and steady progress on the technology roadmap give investors reasons to stay optimistic. The company’s advances in chiplet-based architecture, together with valuable partnerships in government and research, build confidence that it is steadily moving toward the goal of quantum advantage in the coming years.

With a Zacks Rank #2 (Buy), Rigetti offers an intriguing opportunity for investors who are comfortable with some volatility in exchange for long-term growth potential. At this stage, the stock is better suited for those with a higher risk appetite, as commercial traction is still developing. For patient investors, Rigetti’s combination of financial stability and technology leadership could make it a compelling stock to watch. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.