Assessing Rigetti’s Lofty Valuation Amidst Market Turbulence

Rigetti US76655K1034

Rigetti Computing's shares enter the new year carrying a valuation that appears increasingly disconnected from its underlying business performance. Despite a significant annual gain, the stock trades far below its recent peak, raising critical questions about the sustainability of its market price in the face of weak fundamentals.

From a charting perspective, Rigetti's equity is navigating a precarious juncture. The $22 level has been identified as a key support zone, tested repeatedly towards the year's end. The current share price of $22.15 sits just below the 50-day moving average. Market volatility remains exceptionally high, with a 30-day reading near 94%, while the Relative Strength Index (RSI) at approximately 51 indicates a neutral momentum signal.

The immediate focus is on stability within this price region. A decisive break below the noted support could trigger renewed and significant selling pressure, especially given the substantial swings already experienced in the fourth quarter. Conversely, establishing a sustained footing above this level is viewed as a technical prerequisite for justifying the company's multi-billion dollar market capitalization.

A Year of Extreme Swings

The stock concluded 2025 with an impressive annual advance of roughly 46%, substantially outperforming the broader market indices. This headline figure, however, masks a year of dramatic volatility.

Driven by intense speculation surrounding quantum computing, the share price soared to an all-time high of $58.15 in October 2025. What followed was a sharp correction exceeding 60%, bringing the stock to its present level. Consequently, the shares now trade more than 50% below their 52-week high of $48.36, despite showing a modest gain over the most recent 30-day period.

The Core Disconnect: Valuation Versus Fundamentals

The chasm between Rigetti's market value and its financial results is striking and a central point of concern. The company's market capitalization stands at approximately $7.3 billion. This valuation contrasts starkly with its third-quarter 2025 revenue of just $1.95 million, which itself represents a decline of over 18% year-over-year.

This results in a Price-to-Sales (P/S) ratio surpassing 900. Even for a speculative, future-oriented sector like quantum computing, this multiple is extraordinarily high. The combination of declining revenue and a multi-billion dollar valuation strongly suggests that the current share price is being driven almost exclusively by future expectations and market momentum, rather than present business performance.

Short Products Add a Layer of Pressure

Further complexity has been introduced by new financial instruments targeting the stock. October 2025 saw the launch of the Defiance RGTZ ETF, a double-leveraged product designed to profit from a decline in Rigetti's share price.

The existence of such a dedicated short ETF indicates that professional market participants are actively speculating on a potential downturn or seeking to hedge against significant losses. In practice, this can amplify price volatility: profit-taking from early investors, meeting increased short-selling activity, has the potential to trigger rapid and pronounced price movements.

Ultimately, the primary risk remains the vast gap between modest commercial revenues and an exceptionally high market valuation. Until Rigetti demonstrates clear progress in growth and earnings, its shares are likely to remain highly susceptible to shifts in market sentiment and abrupt price corrections.