Is Rigetti Computing a Buy in 2026?

It's generally not a good idea to buy stocks that have recently rallied based on hype. If the stock price growth doesn't reflect an improvement in fundamental metrics like profit or cash flow, it probably won't last very long.

Investors in Rigetti Computing (NASDAQ: RGTI) learned this the hard way. Shares in the quantum computing start-up are down by an eye-popping 60% from their all-time high of $56 reached in October. That said, not much has changed in the quantum computing industry as a whole -- and that's partially because there isn't much there to begin with today.

Let's dig deeper to see if the situation might change in 2026 and decide if Rigetti Computing is a good way to bet on the long-term opportunity.

The next technology megatrend?

Quantum computers are a theoretical device designed to solve complex problems by replacing a traditional computer bit (which can only be in one of two states) with a qubit, which can be in multiple states at the same time. The difference can be likened to a coin that is either heads or tails compared to a coin that remains spinning in the air.

This technology is beyond the limits of current physics and computer science. However, if it eventually works, it could create billions in shareholder value by allowing companies to quickly discover new drugs, chemical compounds, and even the most efficient logistics routes. Rigetti has positioned itself on the picks-and-shovels side of this opportunity, aiming to provide the hardware other enterprises will use to unlock value.

The company is already building early-stage quantum computers and processors while also offering a cloud-based service that allows clients to remotely access its devices through traditional computer interfaces.

Most importantly, Rigetti has the capacity to manufacture its own chips in the U.S. at its foundry in Fremont, California. Not only does domestic manufacturing add a level of political protection (quantum computing is a geopolitically sensitive technology), but it could also open up an opportunity to build quantum chips for other companies, similar to the role Taiwan Semiconductor Manufacturing plays in traditional semiconductor chip manufacturing.

Will quantum computing be ready in 2026?

Image source: Getty Images.

Rigetti clearly has a very compelling business model. By tackling the picks-and-shovels side of the quantum computing opportunity, it will shield itself from the risks faced by more consumer-facing companies as they seek to pioneer a brand new technology. That said, even the best strategy will ultimately fail to generate shareholder value if it seeks to monetize an industry that simply isn't commercially viable right now.

Rigetti's third-quarter earnings highlight the gravity of the challenge. Revenue fell 18% year over year to $1.95 billion, while operating losses increased to $20.5 billion. Rigetti's early sales (to organizations experimenting with quantum computing) are not enough to cover the company's substantial research and development budget.

This situation looks unlikely to change in 2026 because industry leaders like Alphabet and International Business Machines believe commercially viable quantum computers are four to five years away. A smaller company like Rigetti probably doesn't have a more advanced quantum computing program than these megacap technology giants, so there is no reason to believe it will be faster.

With a price-to-sales (P/S) multiple of 843, Rigetti stock is still quite expensive compared to the S&P 500 average of 3.4. And that means there is plenty of room for continued downside in the new year.

Rigetti Computing stock is a hold

Some stocks don't fit neatly into categories like buy and sell. Sometimes, it makes the most sense to hold a company on your investment watchlist until something changes that makes the risk-to-reward potential look more attractive. Rigetti Computing faces too many uncertainties to make it a compelling buy in 2026. But the future may be brighter as quantum computing technology improves over the coming years or decades.

Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.