Rigetti Computing Faces Mounting Headwinds as Funding Needs and DARPA Setback Cloud Prospects

Rigetti US76655K1034

Quantum computing is widely touted as a major future technology, but Rigetti Computing is encountering growing headwinds. An analyst downgrade has laid bare the financial and competitive obstacles the company faces, with a steep cash burn tied to production looming large for investors.

The investment bank TD Cowen trimmed its rating on Rigetti on Thursday, shifting from Buy to Hold. While the firm acknowledges progress in the technology, its analysts now judge the risk-reward profile to be unfavorable, made worse by the stock’s ambitious valuation. At the heart of the skepticism lies Rigetti’s substantial capital needs: a new manufacturing facility is expected to be required by mid-2026 or by the end of 2026, according to the consensus of the analysts. The projected funding requirement for this project is over $300 million.

Setback in government contracts

The competitive landscape in the public sector further compounds the challenge. Rigetti had been selected in April 2025 for the first phase of the DARPA Benchmarking Initiative (QBI), but in November it did not advance into Phase B. Eleven competitors now have access to significant funding pools and prestige projects, while Rigetti remains on the outside looking in.

A second qualification for the program could be possible later in the year, but it would demand substantial technological improvements. This setback matters, because top-line growth and new client acquisitions have already lagged behind several rivals.

For investors, the focus shifts to the second half of 2026. Key questions will be whether Rigetti can secure financing for the planned plant without excessive dilution to existing shareholders and whether its technological upgrade path can enable a successful comeback in the DARPA program.

@ boerse-global.de | US76655K1034 RIGETTI