Rigetti Computing shares tumble 22.6% as investors question quantum computing valuations

Shares of Rigetti Computing fell 22.6% in July, according to data provided by S&P Global Market Intelligence, as investors rotated out of unprofitable technology stocks amid growing skepticism regarding returns on heavy spending in artificial intelligence and quantum computing. The decline occurred despite the company reporting an 185% revenue spike in the second quarter to $5.14 million and holding $541.3 million in cash with no debt. Investors cited the company's high price-to-sales ratio of 444 and an operating loss of $54 million in the first half of 2026 as key factors driving the sell-off.

Technology investors scrutinized their investments last month, with many trimming positions as they worried that capital spent on artificial intelligence, data centres, and quantum computing would not prove worthwhile. Semiconductor stocks were especially shunned, with 20 leading semiconductor companies losing more than $1 trillion in cumulative market capitalisation. While Rigetti is not classified as an AI company, it is spending heavily to grow its quantum computing business, with research and development costs reaching nearly $41 million in the first half of 2026.

The company’s financial metrics highlight the disconnect between its market valuation and its current profitability. Rigetti reported revenue of just $9.5 million for the first six months of 2026, contributing to an operating loss of $54 million. The firm’s stock trades at a price-to-sales ratio of 444, which is significantly higher than the technology sector average of approximately 8. With shares trading at such a high premium and the company spending heavily without generating profits, some shareholders viewed the stock as too risky to hold.

Despite the monthly decline, Rigetti’s shares rose approximately 4% following the release of second-quarter results on 6 August. Revenue for the quarter ending 30 June spiked 185% to $5.14 million, slightly exceeding the Wall Street consensus estimate of $5.09 million. The company also holds $541.3 million in cash, cash equivalents, and investments, which provides substantial liquidity to continue investing in its quantum computing technologies without the burden of debt.

However, the current financial structure does not erase the fact that Rigetti remains unprofitable and carries a very pricey stock. This dynamic suggests that current shareholders will have to ride out intense volatility without any guarantees of eventual success. The broader market sentiment indicates that investors are increasingly impatient with high-spending companies that do not turn a profit, a trend that has spread from AI stocks to the quantum computing sector.