Rigetti Q3 Losses Widen; WAIT Thesis Unchanged

What happened

Rigetti reported Q3 results with strong revenue growth but widening losses, a pattern consistent with our existing WAIT thesis. The $5.5 billion market capitalization remains far ahead of the roughly $20 million annualized revenue base, leaving no margin of safety outside the $541 million cash position. The key catalysts are unchanged: definitive CHIPS funding, C-DAC deployment, and 108-qubit fidelity improvement, none of which are confirmed by this earnings update. The article's focus on "hold or fold" reflects the same tension between quantum promise and current financial reality. No new information in the Zacks piece alters our assessment that the stock is fairly valued only if all milestones hit on time.

Implication

Investors should hold positions only if they accept binary milestone risk over the next 6-9 months. The widening Q3 losses reinforce that revenue scale is still too small to offset fixed R&D and infrastructure costs. The premium valuation leaves no cushion if the Commerce LOI fails to convert or C-DAC slips. Our base case value of $16 per share is now only marginally above the recent price of $16.53, offering little upside without new proof. We would trim above $22 and only consider adding near $13, contingent on definitive funding or fidelity improvements.

Thesis delta

No fundamental shift; the Q3 update is consistent with our WAIT rating. The widening losses were already embedded in our scenario analysis, which assumed annual losses above $100M. The article adds no new data on the four core milestones, so our thesis and price levels remain unchanged.