We must lower our expectations

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The explosive move in Rigetti Computer (RGTI) stock has led its CEO to warn investors that it will take time for the company to achieve sustainable sales growth and profits.

“Especially because of the hype that's going on in the quantum computing space and some of the false rhetoric, including from people in the industry, we have to temper some of our expectations,” Rigetti Computing CEO Subodh Kulkarni told me at the opening of Yahoo Finance. Bid Podcast (video above; listen below).

Kulkarni spoke to Yahoo Finance on Tuesday after attending a New York City conference at investment bank Needham.

“So I have to tell (investors) that now is not the time to talk about sales and sales growth because we are still in technology development mode. We have to perfect the technology first before we can start to see a real material difference in sales,” Ku said Erkani explained that he was an engineer by training.

The comments follow a series of frenetic moves in quantum computing stocks, which have attracted momentum traders in recent months amid hype around artificial intelligence.

On Tuesday, Rigetti Computer (RGTI) shares rose 48% in one day, D-Wave Quantum (QBTS) rose nearly 23%, and Quantum Computer (QUBT) rose nearly 14%.

Meta's (META) shares fell a day after CEO Mark Zuckerberg said on the Joe Rogan Podcast that “very useful” quantum computing could be “more than a decade away.” Zach's comments echoed pessimistic comments made by Nvidia CEO Jensen Huang at CES last week.

These high-profile naysayers have yet to reach Kulkarni, who has watched his company's stock price soar more than 777% in the past year. The company's market capitalization now exceeds $2 billion, and its ticker page has been one of the most active on Yahoo Finance in recent months.

The problem, however, is that Rigetti has never profited from its quantum chip manufacturing business. As of last year's third quarter, the company had a net loss of $45 million. Additionally, Rigetti noted in a recent filing that the company may need more cash by the second quarter of 2026 to fund its chip manufacturing ambitions.

Read more: Why Nvidia Sell-Off Is Overdone

Kulkarni rejected the company's request to raise more cash.

“We're always thinking about what we can do. So we never want to say we won't do something because things may change. But as of today, we don't need to raise more money in the foreseeable future,” Kulkarni explain.

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But he acknowledged the road to profitability will be long.

“We're in investment mode right now. We do have some sales, but it's primarily government contract type opportunities,” he said.

“Assuming the timeline I described previously holds true and we begin to see material sales opportunities in three to five years, we certainly expect the company to begin to achieve cash flow breakeven during that time and, thereafter, Profitability will follow.”

Despite the uncertain profit outlook, Wall Street continues to be bullish on the sector.

“Overall, we believe that despite the well-publicized CEO views on the long road to commercialization, a recent series of data points (and in some cases materially understated) provide broadly encouraging technical “Advances can significantly increase confidence in quantum technology in the mid- to long-term,” B. Riley analyst Craig Ellis said in a report this week: “Long-term high-value workload scalability into traditional CPU and GPU computing cannot be achieved. sector, thereby enhancing our bullish thesis on the industry in the coming years. “

Brian Sozzi is the executive editor of Yahoo Finance. Follow Sozzi on X @bryansozzi etc. LinkedIn. Advice on a deal, merger, activist situation, or anything else? Email [email protected].

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