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Investing.com - Rigetti Computing Inc. (NASDAQ:RGTI) was downgraded from Buy to Neutral by B.Riley on Monday, despite a price target increase to $42.00 from $35.00. The stock currently trades at $44.27, already exceeding the new price target and significantly above InvestingPro’s Fair Value estimate, suggesting the quantum computing company may be overvalued after its extraordinary 3,499% gain over the past year.
The quantum computing company has secured $11.5 million in new deals in September, expanding its commercial opportunities as it progresses on its roadmap from 100-qubit to 1,000-qubit systems between year-end 2025 and 2030.
B.Riley expects Rigetti to meet consensus estimates for the third quarter of 2025, though the firm notes the company typically does not provide fourth-quarter guidance and cautions about potential sales risks due to delayed U.S. government funding authorizations. With earnings scheduled for November 10 (just 7 days away), investors should note that analyst targets range widely from $18 to $50, reflecting uncertainty about the company’s path to profitability.
The research firm considers Rigetti’s quarterly operating cash burn of approximately $19 million to be manageable given the company’s substantial cash reserves of $572 million. InvestingPro data confirms the company operates with a moderate debt level and its liquid assets exceed short-term obligations, supporting B.Riley’s assessment of the cash position.
The downgrade comes after Rigetti’s stock has surged 190% year-to-date, bringing its market capitalization to $14.3 billion, which B.Riley believes now prices in 52% of the total addressable market from 2030 to 2035 and "a significant percentage of long-term commercial success." With a Price/Book ratio of 25.94 and trading at high revenue multiples, InvestingPro’s analysis shows Rigetti among the more richly valued stocks. Discover comprehensive valuation metrics and 16 additional ProTips for RGTI in the detailed Pro Research Report, available exclusively to subscribers.
In other recent news, Rigetti Computing has been actively making strides in the quantum computing sector. The company secured purchase orders worth approximately $5.7 million for its 9-qubit Novera quantum computing systems, with deliveries planned for the first half of 2026. Additionally, Rigetti was awarded a $5.8 million contract from the Air Force Research Laboratory to advance superconducting quantum networking in collaboration with Dutch startup QphoX. This project aims to develop systems that enable entanglement between superconducting qubits and optical photons.
In terms of stock analysis, B.Riley downgraded Rigetti Computing from Buy to Neutral, despite raising the price target to $42.00. Meanwhile, Benchmark increased its price target for Rigetti to $20.00, maintaining a Buy rating, citing strong second-quarter results and progress in chiplet-based scaling. Rigetti’s collaboration with NVIDIA on an open platform for integrating AI supercomputing with quantum computers was also highlighted at the NVIDIA GTC in Washington, D.C. These developments indicate Rigetti’s ongoing efforts to expand its technological capabilities and market presence.
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