Rigetti Computing, Inc. (NASDAQ:RGTI) is experiencing a noticeable rise in its stock price this Thursday, reflecting increased investor confidence following a strategic reassessment by B. Riley Securities. The investment firm elevated Rigetti's rating from neutral to buy and preserved a price target of $35, underscoring renewed optimism in the company's trajectory within the quantum computing space.
B. Riley analyst Craig Ellis highlighted that the enthusiasm underpinning Rigetti's shares traces back to encouraging indicators across the company's commercial development front. A recently secured $8.4 million order has become a particularly impactful milestone, as it corresponds to a substantial portion of the consensus revenue expectations for calendar year 2025 — comprising approximately 48% of the low-end and 36% of the high-end projections. This sizeable contract injects tangible evidence of tangible progress into the company’s financial outlook amid a generally positive sector environment.
Broadly, the quantum computing industry is gaining momentum, signified by events such as the Quantum World Congress held in Washington, D.C., this past September. This conference attracted around 1,000 participants, spotlighting a steadily maturing ecosystem focused on advancing quantum technologies within U.S.-friendly jurisdictions. Additional signs of transition toward commercialization include workload migration validation at Laurence Berkeley National Laboratory, indicating that key technical research initiatives are moving closer to operational deployment. Such developments foster expectations that funding allocations may convert into actionable contract awards.
Rigetti's expanding footprint extends beyond current orders to encompass new areas such as contracts with U.S. academic institutions and international government agencies, highlighting an anticipated follow-through period into early 2026. The company remains attentive to upcoming commercial agreements and contract acquisitions aligned with U.S. National Laboratories, the U.S. Air Force Research Laboratory with its U.S. Space Force association, and international government entities. This concentrated focus throughout the remainder of the year reflects a strategic drive to capitalize on varied public-sector market opportunities.
However, despite these promising advancements, the firm’s financial and operational profile entails considerable inherent risks. Rigetti maintains and continues to develop a significant portfolio of intellectual property assets encompassing patents, copyrights, trademarks, and trade secrets, emphasizing the importance of proprietary technology in its competitive positioning. Nevertheless, the company has consistently reported operational losses historically and anticipates that such financial outflows will persist moving forward, highlighting the ongoing expense base related to research and development efforts.
Management has indicated the expectation of requiring additional capital raises to sustain the current pace of R&D expenditure, pointing to the vital dependency on external funding to support ongoing innovation activities. Moreover, the full commercial value proposition for quantum computing remains uncertain at this stage, as does the definitive effectiveness of the specific implementation methodologies pursued by Rigetti relative to alternative approaches within the industry.
Revenue concentration also poses notable exposure risks. In 2023, over 80% of Rigetti's revenue was derived from U.S. government sources. This dependency makes the business vulnerable to potential policy shifts or budgetary constraints that could adversely affect contract continuity or funding levels. Additionally, the firm's reliance on cloud service providers to deliver computational capacity introduces uncertainties, as these providers might abruptly terminate agreements, impose higher fees, or restrict scalability options, all of which could negatively impact Rigetti’s operational flexibility and cost structures.
In response to these dynamics, Rigetti's stock demonstrated a price appreciation of approximately 4.94%, reaching $24.84 per share as recorded at mid-day Thursday, indicating investor responsiveness to the combination of positive catalyst events and cautious risk awareness.