Is Rigetti's Growth Model Too Dependent on Government Deals?

Rigetti Computing RGTI continues to draw heavily from U.S. government contracts to fund and validate its quantum technologies. Some examples include a $1.5 million contract extension with the Air Force Research Lab for quantum software development and a $3.9 million contract with DARPA to advance quantum hardware scalability. Rigetti also secured a multi-year project with the Department of Energy’s (DoE) Superconducting Quantum Materials and Systems Center and delivered its 84-qubit Ankaa-1 system to the DoE's Quantum Systems Accelerator. These engagements provide valuable non-dilutive capital and technical feedback, reinforcing Rigetti’s status as a trusted partner in early-stage quantum research and development for the government.

However, this public sector-heavy revenue stream raises questions about scalability and commercial maturity. Government projects often follow long procurement cycles and may not evolve into high-margin, recurring contracts. With minimal evidence of material private sector adoption so far, Rigetti’s reliance on public funding suggests its business model is still in the validation phase. While these partnerships are strategic, the absence of diversified revenue streams limits visibility into Rigetti’s long-term commercial trajectory.

Peers Blend Government Support With Private Market Momentum

IonQ IONQ has received notable U.S. government support, including a $13.4 million contract from the Air Force Research Lab to develop advanced trapped-ion quantum systems, along with research collaborations under DoE programs. At the same time, IONQ has made significant headway in the private sector, converting early pilots with Hyundai, Airbus, and Fidelity into active enterprise engagements. Its strong integration with AWS, Azure, and Google Cloud further positions it for commercial adoption across various sectors, including automotive, aerospace, chemicals, and finance.

D-Wave QBTS collaborates with agencies such as the Canadian Space Agency and U.S. defense entities through its quantum annealing platform, while simultaneously carving out a clear path for enterprise adoption. The company has launched active pilot projects in logistics optimization, materials science, and workforce scheduling for clients like SavantX and Volkswagen. D-Wave’s emphasis on hybrid quantum-classical solutions positions it for near-term value creation in both government and commercial domains, giving it broader revenue flexibility than Rigetti today.

Rigetti’s Price Performance, Valuation and Estimates

Shares of RGTI have lost 14.3% in the year-to-date period against the industry’s growth of 14.7%.

From a valuation standpoint, Rigetti trades at a price-to-book ratio of 18.12, above the industry average. RGTI carries a Value Score of F.

The Zacks Consensus Estimate for Rigetti’s 2025 earnings implies a significant 86.1% rise from the year-ago period.

The stock currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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