The RGTI Stock Hype: Why It's Surging and Why I'm Not Buying It

Let me get this straight. Rigetti Computing, a company that pulled in a whopping $1.8 million in revenue last quarter—less than a decent-sized McDonald's franchise—is now worth somewhere around $13 billion. Its stock, RGTI, was trading for less than a buck a year ago. Today, it’s flirting with $40.

This isn’t a typo. This is the market we live in now. A world where a company's value has absolutely nothing to do with what it actually sells or earns. Instead, it’s powered by a volatile cocktail of hype, hope, and the sheer, unadulterated fear of missing out. The numbers are so completely unmoored from reality that you have to laugh. Or cry. I haven't decided which yet.

The whole thing feels like watching a magic trick where you can clearly see the wires. Everyone in the audience is gasping and applauding, but you’re just sitting there, thinking, "Are you guys seeing this? The wires are right there."

The Gospel of "Good News"

So what’s fueling this rocket ship to the moon? A couple of press releases, of course.

In late September, Rigetti announced a cool $5.7 million in orders for two of its quantum computers. A few weeks before that, it landed a $5.8 million contract with the U.S. Air Force. The market reacted as if they’d just cured cancer and discovered cold fusion in the same afternoon. The two Novera orders alone—a measly $5.7 million—instantly added over $1.5 billion to Rigetti's market cap.

This is like finding a winning $10 scratch-off ticket and using it as a down payment on a Beverly Hills mansion. The math just ain't mathing.

The CEO, Dr. Subodh Kulkarni, hailed the orders as evidence of “increased demand for on-premises quantum computing systems as the industry matures.” Increased from what, exactly? The company's revenue was down 42% year-over-year. Is "increased demand" just code for "we finally sold something"? It feels like we're celebrating a Little League team for making contact with the ball, never mind that they struck out the last twenty times.

And let's be real, the tech itself is still basically a science experiment. While the company's progress leads some to ask about Rigetti Computing’s Breakthroughs: Is It the Right Time to Invest?, they’re talking about a 36-qubit processor and a roadmap to 100+ qubits. That’s great. It’s progress. But it’s progress in a lab. We are years, maybe a decade, away from this technology having any widespread commercial value. The company’s own CEO admits they are “four to five years from real commercial value.” So why is it being valued today as if it’s already changed the world?

Follow the Money... Right Out the Door

If you want the real story, stop reading the press releases and start following the money. The company is losing nearly $40 million a quarter while bringing in less than $2 million. It’s burning cash like a bonfire.

So how does it have over half a billion dollars in the bank? Simple. It sold stock. A lot of it. Rigetti raised about $350 million by issuing new shares directly into this buying frenzy, diluting the hell out of every poor soul who bought in earlier. It’s a bold strategy. No, "bold" is too kind—it's utterly insane. They’re funding their science project by selling lottery tickets to the public, and the public is lining up around the block to buy them.

And who is selling? Why, the insiders, offcourse. Executives and directors have been dumping millions of dollars worth of stock as the price has soared. Can you blame them? If someone offered you $40 for something you know is fundamentally worth a tiny fraction of that, you’d sell, too. It’s the only rational move. The people who know the company best are quietly heading for the exits while the retail crowd, buzzing with FOMO on Reddit forums, is breaking down the door to get in.

Even Wall Street analysts, who are paid to be optimistic, can’t make this make sense. The consensus price target for RGTI is around $20. That's 50% below its current price. They’re all slapping "Buy" ratings on it because they don't want to miss the rocket ship, but their own numbers scream that the ship is flying way too high. It's a pathetic, cover-your-ass dance that serves no one but their own bonuses. It reminds me of the people who pay $1,000 for a plain white t-shirt because it has the right logo on it. The value is pure perception, a collective delusion we all agree to participate in.

The entire quantum computing sector is like this. While some believe there are 3 Quantum Computing Stocks That Could Make a Millionaire, companies like IonQ, D-Wave... they're all trading at valuations that have completely detached from any recognizable fundementals. It’s a mania. And manias always end the same way. The only question is when.

Just Don't Be the Last One Holding the Bag