Rigetti Computing Inc. (NASDAQ:RGTI) missed its fourth-quarter estimates but equated its quantum computing progress with International Business Machines (NYSE:IBM) and Alphabet Inc.‘s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google with an ambitious target of scaling its chiplet strategy up to 100 qubits in 2025.
What Happened: Quantum computing race heats up as Rigetti’s president and CEO, Subodh Kulkarni, said during the company’s earnings call that it is a leader in the space as it is competing right at the top along with IBM and Google.
Explaining that RGTI’s roadmap was comparable to IBM, Google, Kulkarni added that “we certainly view ourselves along with IBM and Google in the leadership position”.
After its latest launch of 84-qubit Ankaa-3 system in December 2024, it outlined plans to scale to 100-plus qubits by the end of the year. However, IBM had unveiled its 400 qubit-plus quantum processor in 2022, which was not deployed because of challenges, said Kulkarni.
“IBM tried to go to 430-qubits a year ago and they had some challenges, which is why you don’t find it deployed right now,” he added. Google, on the other hand, last launched its Willow chip with 105 qubits.
Why It Matters: Despite IBM and Google’s lead in qubit counts, RGTI remained confident with its CEO saying that there were over 10 things to “differentiate” them from the peers. “The main differentiators are our open modular architecture, chiplet approach and a few other things like annealing,” Kulkarni said.
Along with this, RGTI expects strong government funding and focus on R&D to keep them competitive in fidelity and gate speed advancements. “So overall between DOE and DoD, we are expecting sizable increase in U.S. government investment in quantum computing,” said CEO.
Its fourth quarter revenue came in at $2.3 million, missing estimates, with an adjusted EPS loss of $0.08, which met the estimates. Full-year revenue was $10.8 million, and net loss was $201 million. RGTI ended the year with $217.2 million in cash.
Rigetti also partnered with Quanta Computer with the latter investing $35 million and both committing over $100 million to the collaboration over the next five years.
Price Action: Rigetti rose 4.07% on Wednesday and fell 11% after-hours following its earnings announcement. The exchange-traded fund tracking the Nasdaq Composite index, Fidelity NASDAQ Composite Index ETF (NASDAQ:ONEQ) rose 1.43%.
The stock remains 59.10% lower on a year-to-date basis, however, it’s up 359.55% over a year.
Benzinga tracks eight analysts with an average price target of $8.43 for the stock, reflecting a “buy” rating. Estimates range widely from $1.5 to $15. Recent ratings from Benchmark, and B. Riley Securities average at $12.5, suggesting a potential 71.70% upside.
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