The year 2025 saw the artificial intelligence sector perform robustly, with the quantum computing segment exhibiting particularly strong momentum. Notably, the Defiance Quantum ETF closed the year on December 23 with a remarkable 37% gain, more than twice the return of the S&P 500 index. Within this ETF, standout performers were those focused exclusively on quantum technologies, among which Rigetti Computing recorded an impressive 46% price increase.
Understanding Rigetti’s role in the quantum ecosystem is essential to contextualize its market performance. The company specializes in the development of quantum processors and computers that are accessible via cloud infrastructure. It adopts a vertically integrated model—overseeing the manufacturing of its own quantum chips and concurrently designing the supporting software framework. This full-stack approach aims to catalyze the emergence of computational capabilities beyond the reach of current classical systems.
The potential impact of quantum computing on various industries is significant, according to research consultancy McKinsey & Company. Their analysis suggests that quantum computing could contribute as much as $2 trillion in economic value over the next decade. Applications poised for transformation include clinical research, financial risk modeling, logistics, supply chain coordination, and manufacturing processes. However, at present, only a handful of enterprises maintain dedicated efforts towards advancing quantum computing technologies.
The significance of Rigetti’s technology intersects importantly with the trajectory of artificial intelligence. Should Rigetti achieve a breakthrough in quantum capabilities, it would enable the deployment of next-generation AI algorithms beyond the capacity of today’s most advanced GPU-based systems. This potential underlines the current market enthusiasm for the company’s stock.
Despite this optimism, a critical examination of Rigetti’s valuation reveals cautionary signals. The stock now trades at a price-to-sales (P/S) ratio of approximately 925, an extraordinarily elevated figure compared to historical precedents. For context, major early internet companies such as Amazon and eBay reached P/S multiples of 51 and 144, respectively, before the burst of the dot-com bubble. This stark disparity highlights the risk of overvaluation driven by speculative investment behavior often described as the "greater fool theory," where investors buy into momentum at premium prices hoping to sell to others at a higher value.
Furthermore, stock price movements are rarely linear. Though Rigetti’s shares advanced 46% over 2025, they experienced even more dramatic price appreciation throughout the year, including spikes exceeding 200% and an aggregate increase approximating 2,600% over the broader AI development period. This parabolic rise often precedes market corrections as valuations realign with underlying business fundamentals.
Historical analogues offer perspective on potential future trends. For example, the technology giant Cisco once held a market capitalization of $555 billion in 2000 but saw its value collapse by nearly 90% amid the aftermath of the dot-com bubble, dropping to $63 billion. Even 25 years later, Cisco's market cap has not fully recovered to prior peak levels. Such downturns are characteristic of emerging tech stocks with speculative valuations, limited revenue streams, unproven product-market fit, and ongoing capital expenditure requirements.
By comparing Rigetti to these precedents, it seems plausible that the company’s stock could experience substantial price declines within the near term. Estimates suggest a potential trading range between $3 and $7 per share by the conclusion of 2026, contingent on the magnitude of any market correction and investor sentiment shifts. These projections signify notable downside risk for current stakeholders.
In summary, while Rigetti Computing represents an exciting frontier in quantum computing and the broader AI ecosystem, its current market valuation poses significant questions about the durability of recent gains. Investors are advised to regard participation with caution given the speculative nature of the company’s growth prospects and the volatility inherent to emerging technology sectors.