Rigetti Computing (RGTI) Shares Drop 8.8% on TD Cowen Downgrade Amid Quantum Funding Concerns

Rigetti Computing's stock fell sharply after TD Cowen downgraded it from buy to hold, citing looming capital requirements and competitive pressures in the quantum computing sector. The company faces a potential $300M+ fabrication facility investment by 2028 to achieve 99.9% chip fidelity—a critical threshold for commercial viability—against a current cash position of $525M and annual burn rate of $70-80M.

Missed opportunities compound the challenges: Rigetti was excluded from DARPA’s QBI Stage B program, which grants winners $1M+ quarterly funding and access to multi-year government quantum projects. Meanwhile, its valuation trades at a premium 255x EV/Sales multiple, outstripping peers IonQ (205.7x) and D-Wave (167x) despite weaker revenue performance (-18.1% YoY in Q4).

The quantum arms race demands relentless R&D spending, yet Rigetti’s path to scalability now hinges on securing capital for modular chiplet designs—a bet that left investors spooked.