Rigetti Computing (RGTI) Shows Short-Term Bullish Momentum Amid Speculative Valuation Concerns

Technical Analysis

Rigetti Computing, Inc. (RGTI) closed at $12.26 on June 2, 2025, up 1.24% on the day, showing modest short-term bullish momentum. The stock traded between $11.82 and $12.50 intraday, holding well above its key support level at $11.92. The Relative Strength Index (RSI) at 53 indicates a neutral stance, with no significant overbought or oversold conditions. The 50-day moving average of $9.90 and 200-day moving average of $6.78 exhibit a clear upward trend, as the current price substantially surpasses both averages. The MACD reading of 1.34 over three months confirms positive momentum. Resistance stands near $13.86, suggesting a moderate upside target before encountering selling pressure. Given the Average True Range (ATR) of approximately $10.28, price volatility is comparatively high, which may lead to sharp intraday movements.

For the next trading day (June 3, 2025), the momentum and technical setup favor a slight continuation upward toward resistance around $13.86, barring any unexpected market shifts. Over the coming week, assuming steady market conditions, the stock could test this resistance level, with potential retracements to near $11.92 support acting as a floor.

Fundamental Analysis

Rigetti Computing operates in the emerging quantum computing sector, a high-growth but capital-intensive and technology-risky industry. The company’s trailing twelve-month earnings per share (EPS) is negative at -$0.80, and its price-to-earnings ratio is likewise negative (-15.32), reflecting ongoing operating losses typical for a quantum technology developer still in development or expansion phases. The discounted cash flow (DCF) valuation is also negative, indicating intrinsic value below current market price based on conservative cash flow projections, exposing a speculative valuation component.

Market capitalization stands at approximately $3.56 billion, with average daily volume of 51.76 million shares, suggesting solid liquidity but a relatively small market size relative to large-cap tech peers. The impending earnings announcement on August 6, 2025, remains a critical catalyst for reassessing fundamentals.

Recent industry commentary highlights Rigetti's technological breakthroughs and substantial 1,249% share price appreciation in the past year, reflecting high investor optimism toward quantum computing’s disruptive potential. However, based on consensus analyst targets ranging between $2 and $4 with a median of $3, current valuation appears elevated relative to near-term earnings and DCF estimates. Institutional sentiment favors a 'Buy' consensus with three buys, one hold, and no sells reported.

Intrinsic Value and Long-Term Outlook

The negative DCF and EPS underline the speculative nature of Rigetti’s valuation, indicating the stock trades on future growth expectations rather than current financial performance. Quantum computing remains nascent, and Rigetti must demonstrate sustained technological leadership and commercial viability to realize intrinsic value. Given the sector’s complexity, investments in RGTI entail considerable execution risk but also significant return potential if quantum computing adoption accelerates.

Long-term investors should weigh Rigetti’s technological positioning and recent breakthroughs against its lack of positive cash flow and profitability. The large upward price move over the last year suggests market enthusiasm may be partially priced in, but it also indicates a strong growth narrative underpinned by innovation. Monitoring earnings, cash burn rates, and industry competition should guide the reevaluation of intrinsic value over time.

Overall Evaluation

Categorically, RGTI aligns as a 'Hold' candidate at current levels. The technical setup favors near-term upside but faces notable resistance ahead. Fundamentally, speculative valuation metrics, negative earnings, and a negative DCF suggest caution. Positive developments and sector leadership upside justify maintaining the position for investors with a high-risk tolerance and appetite for long-term growth potential in quantum computing, while the lack of profitability and elevated price levels argue against an outright 'Buy' stance presently.

In summary, Rigetti Computing exhibits promising technological momentum and sector excitement but remains a speculative equity with intrinsic valuation challenges. A balanced outlook leans toward holding amid volatile conditions while awaiting clearer fundamental progress.