Is Rigetti Computing a Buy?

Rigetti Computing (NASDAQ: RGTI) is one of the more popular pure-play quantum computing stocks out there. It's a relatively small business, with a market cap hovering around the $5 billion mark. That leaves plenty of room for upside if the company can deliver a go-to option in quantum computing, but reaching the top in this nascent technology will be no easy feat.

So, is Rigetti Computing a buy right now?

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Rigetti Computing is running behind in a major initiative

Quantum computing is a young and extremely complex technology; that makes it particularly difficult for the layman to gauge the potential of the various companies pursuing it. In such cases, it can be wise to take some cues from outside experts. One of the biggest contracts any quantum computing company can be a part of is the Quantum Benchmarking Initiative (QBI), which is being run by DARPA (Defense Advanced Research Projects Agency). This is a public/private collaboration to fast-track quantum computing technology, and while there may not be an ultimate winner, advancing quickly through each stage of the initiative puts companies on the fast track to deploying their quantum solutions in military applications -- a huge opportunity. Nearly 20 companies entered into this opportunity, including other publicly traded players like IonQ (NYSE: IONQ). There are also tech giants such as Google and IBM taking part.

There are three stages of the evaluation process, and Rigetti didn't advance to the second one in the most recent round. That showcases Rigetti's product is at the very least behind its competition. Rigetti is working on making changes in hopes to advance to stage B on the second try, but time will tell how that pans out.

On another note, Rigetti's growth has been lackluster. In Q4, its revenue totaled $1.9 million, down from $2.3 million in Q4 2024. By contrast, rival IonQ had revenue of $61.9 million in Q4, up 429% year over year.

Rigetti is clearly behind in the quantum computing race, and it may have a difficult time catching up.

Part of the issue stems from the path Rigetti is taking. There are numerous ways to create the "qubits" that sit at the heart of any quantum computer, and Rigetti chose the most popular one: superconducting qubits. To make its chips' circuits superconductive requires cooling the entire quantum chip assembly down to near absolute zero. While there's nothing wrong with this approach, it's the same technique that more well-funded competitors like IBM and Google have chosen. This puts Rigetti directly up against some stiff competition and makes the odds of its success far less likely.

As a result, I can't recommend buying Rigetti Computing's stock. There are far better pure-play quantum computing companies out there that have leading technology and are growing rapidly. If those stocks are too high-risk for you, there are several quantum computing exchange-traded funds (ETFs) you might want to consider, as those funds offer diversified exposure to the entire space. Or, you could pick up shares of one or more of the legacy tech companies competing in the quantum computing area. All of these are better investment options. Until Rigetti shows some life, I think it's best to avoid it.

Keithen Drury has positions in IonQ. The Motley Fool has positions in and recommends International Business Machines and IonQ. The Motley Fool has a disclosure policy.