Rigetti Computing Faces Volatility Ahead of Earnings Amid Mixed Technical and Fundamental Signals

Technical Analysis

Rigetti Computing (NASDAQ: RGTI) closed at $9.70 on May 5, 2025, down 8.80% on elevated volume (9.10 million vs. average 49.95 million, though still below average liquidity). The stock traded between $9.51 and $10.37 intraday, finding intraday support near $9.35 but struggling to maintain levels above the 50-day moving average of $8.90. The 200-day moving average at $5.80 remains well below the current price, signaling a longer-term uptrend is intact. The RSI at 58 indicates moderate momentum without being overbought or oversold, while the positive MACD (3-month) of 0.16 suggests bullish medium-term momentum. The unusually high ATR value near 9.30, when compared to price, implies significant historical volatility but may be distorted or represent a different calculation scale. Immediate technical support holds at $9.35, with resistance at $11.03, a key level to breach for upward confirmation.

For the next trading day (May 6), given the prior day’s sharp decline amid above-average volume and proximity to support, the stock may consolidate or attempt a mild rebound supported by the 50-day moving average. However, momentum remains cautious ahead of the earnings announcement on May 8, making directional moves susceptible to volatility.

Over the upcoming week, RGTI’s price action will likely hinge heavily on earnings results and market reaction. Breaching resistance near $11 could initiate a short-term rally, but failure to hold $9.35 could invite further downside testing. Given the trading range volatility and earnings on horizon, expect higher intraday swings, with a neutral-to-cautious bias until clarity emerges.

Fundamental Analysis

Despite recent stock strength, Rigetti maintains a negative trailing twelve-month EPS of -$1.09 and an unmeaningful negative P/E of -8.61, reflecting ongoing losses typical of a developing quantum computing firm. The market capitalization is approximately $2.69 billion, placing it firmly in the small-cap to mid-cap category, subject to volatility and speculative sentiment.

The discounted cash flow model signals a negative intrinsic value (-2.54), indicating that current cash flow projections do not justify the present market price and point to negative free cash flow or significant capital expenditure requirements. This suggests that Rigetti’s valuation is driven largely by growth expectations rather than current earnings fundamentals.

The collaboration announcement on May 6, involving a multi-channel optical readout of quantum processors with QphoX and the NQCC, enhances Rigetti’s technological roadmap and partnerships, potentially strengthening its competitive positioning in quantum hardware development. Additionally, the recent strategic investment closure by Quanta Computer (April 30) injects financial support and validates strategic confidence from a notable hardware partner. Investor interest has surged recently, as evidenced by a 50% stock increase over the last month amid broader quantum computing enthusiasm, particularly contrasted to peers such as IonQ.

Consensus analyst targets remain low ($2.00-$4.00), with a median and consensus at $3.00, indicating the market may be overextended relative to traditional valuation metrics. However, analyst sentiment clusters towards a "Buy" with three “buy” and one “hold” rating, reflecting optimism on growth potential despite near-term challenges.

Intrinsic Value and Long-Term Potential

The negative DCF and ongoing losses underscore that Rigetti is in a capital-intensive growth phase. Long-term intrinsic value depends heavily on quantum computing adoption timelines and Rigetti’s ability to commercialize its quantum-classical stack effectively. The company’s partnerships and capital inflows lend credibility to its roadmap, but commercial scalability and profitability remain several years out.

For long-term investors with a high risk tolerance, Rigetti represents a speculative growth opportunity in an emerging technology domain, contingent on successful innovation and industry adoption. The stock’s wide historical price range (year high $21.42, low $0.66) reflects both volatility and potential reward for patient capital.

Overall Evaluation

RGTI is best classified as a Hold candidate at this juncture. The technical setup is mixed with short-term weakness but medium-term uptrend support. Fundamental metrics are weak, with negative earnings and intrinsic valuation, yet positive strategic developments and sector momentum sustain growth narratives. The imminent earnings announcement introduces event risk and potential catalysts.

The Hold status reflects a balance between ongoing downside risk from valuation and fundamentals against upside from strategic partnerships and quantum technology potential. Investors attentive to risk and event-driven volatility may maintain positions, while those seeking more stable fundamentals might await clearer proof of profitability and sustainable growth.