A recent surge in the quantum computing sector is being driven by growing expectations of direct US government intervention. At the heart of this speculation is Rigetti Computing, a Berkeley-based firm, following stark warnings from Nobel laureate John Martinis. He cautioned that China is rapidly closing the gap in quantum technology, leaving the United States with a lead measured in mere “nanoseconds.”
Institutional Interest Defies Valuation Concerns
Despite significant financial metrics that raise questions, institutional investor activity is increasing. Rhumbline Advisers has notably expanded its stake in Rigetti. On the operational front, the company hit a key technical milestone in July, achieving its annual target of 99.5% median two-qubit gate fidelity on its modular 36-qubit system.
The firm has also secured concrete commercial successes, including purchase orders totaling $5.7 million for two of its Novera quantum computer systems and a separate $5.8 million contract with the Air Force Research Laboratory. However, the competitive landscape remains intense, with IonQ maintaining a lead in both market capitalization and commercial traction.
Sector Rebounds from Steep Declines
After a six-week downward trend, quantum computing stocks are showing renewed strength. Several names in the space had fallen by as much as 65% from their October peaks. Companies like Rigetti, IonQ, and D-Wave Quantum are now breaking out of their multi-week consolidation patterns on elevated trading volume.
Should investors sell immediately? Or is it worth buying Rigetti?
The fundamental picture for Rigetti, however, presents a contrast. Over the past twelve months, the company generated only $7.5 million in revenue while posting a loss of $350 million. With a market capitalization hovering around $9 billion, the company itself does not anticipate significant near-term revenue growth.
Nobel Laureate Sounds the Alarm in Washington
The catalyst for the recent market movement originated from an authoritative source. Martinis, who has been received at the White House multiple times in recent weeks, told Bloomberg News that China has been “catching up fast.” He indicated that the US government now views quantum computing as a matter of national security.
The researcher suggested that following initiatives to bolster the domestic AI industry, quantum technology is now coming into focus for the administration. Market participants are interpreting these statements as a potential signal for forthcoming state support, which could range from direct contracts to strategic equity investments.
The growing geopolitical dimension adds substantial weight to the investment thesis. As China’s progress in quantum technology accelerates, pressure is mounting on Washington to provide concrete support to homegrown companies in this strategically vital field.
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