Rigetti Computing: Strong Technicals Amid Fundamental Risks Indicate Cautious Market Outlook

Technical Analysis

Rigetti Computing (RGTI) closed at $11.82 on June 4, 2025, down 1.83%, trading within a narrow intraday range of $11.65 to $12.18. The stock is comfortably above both its 50-day ($10.02) and 200-day ($6.89) moving averages, signaling sustained bullish momentum over the medium and long term. The 14-day RSI stands at 51, indicating a neutral momentum, neither overbought nor oversold. MACD remains positive at 1.42, supporting an ongoing uptrend despite minor pullbacks. Immediate support is at $11.64, while resistance is near $11.92, marking a tight trading range that could lead to a near-term breakout or breakdown. The Average True Range (ATR) at approximately $10.09 appears anomalously high and may reflect historic volatility or data irregularities; recent price action shows comparatively low volatility. Volume on June 4 (29.19 million shares) is below the 3-month average of 51.39 million, suggesting lowered trading interest but no bearish conviction.

For the next trading day (June 5), the stock is likely to consolidate between support and resistance levels. Breakout above $11.92 could attract short-term buyers pushing prices higher, while breach below $11.64 risks a sharper correction. Over the upcoming week, barring adverse sector-wide news, the technical setup favors moderate upward price stability supported by strong moving averages and positive momentum indicators.

Fundamental Analysis

Rigetti Computing remains a loss-making entity with a trailing twelve months EPS of -$0.80, reflecting ongoing investments in research and development characteristic of early-stage quantum computing firms. The negative P/E ratio of -14.77 underscores the lack of current profitability. The discounted cash flow (DCF) model outputs a significantly negative intrinsic value (-$2.37), reinforcing that the market price does not reflect near-term free cash flow generation but rather growth expectations and technological potential.

Market capitalization stands at approximately $3.46 billion, with the stock having experienced an extraordinary 1,100% rally over the past year, propelled by growing optimism about quantum computing’s disruptive prospects. Despite the sharp appreciation, the stock trades well below its 52-week high of $21.42, leaving room for considerable volatility. Analyst consensus is generally positive with a “Buy” consensus composed of 3 buys and 1 hold rating, while target prices remain modest (median $3.00), indicating some disconnect between analyst caution and market exuberance.

Upcoming earnings scheduled for August 6, 2025, will likely remain pivotal in judging the company’s execution on commercialization and capital management.

Intrinsic Value and Long-Term Investment Potential

The negative DCF and EPS suggest that intrinsic valuation currently does not support the elevated market price from a traditional cash flow perspective. Rigetti is investing heavily in pioneering quantum computing technologies that could engender exponential growth if commercial breakthroughs continue. This positions the stock as a speculative long-term play, where value is derived from potential market disruption rather than present fundamentals.

Given the nascent industry and long technological timelines, the intrinsic value may eventually converge positively as revenues diversify and profitability becomes attainable. Patience and capital to endure volatility are necessary for such retrospective capital gains.

Overall Evaluation

Rigetti Computing exhibits strong technical indicators in an emerging growth sector with notable investor enthusiasm. However, fundamental metrics reveal significant losses and high valuation risk, underpinned by speculative growth rather than demonstrable cash flow.

The stock is best categorized as a Hold at this juncture. The technical setup supports stability and modest upside in the short term, but fundamental uncertainties and stretched valuations argue against aggressive accumulation or selling. Investors positioned for long-term exposure to quantum computing should monitor earnings developments and broader market acceptance closely.