Rigetti Computing Stock Surged -- Here Is What Is Driving the Rally

Rigetti is receiving major government backing to reinforce its position as a strategic quantum computing player.

Still, it remains an early-stage company with significant losses, making it a high-risk, high-reward investment.

Rigetti Computing (NASDAQ: RGTI) stock has been on a tear, and the rally is not random trading noise. It is being fueled by a string of company announcements that, taken together, make Rigetti look less like a tiny lab project and more like an emerging strategic asset in government-backed quantum infrastructure. The excitement is understandable, even if the risk is still very real.

The turning point was Rigetti's announcement on May 21 that it had signed a letter of intent with the U.S. Department of Commerce for an award of up to $100 million over three years under the CHIPS and Science Act. That money is earmarked for superconducting quantum computing research and development, aimed at tackling the hard engineering problems of scaling multi-chip quantum processors.

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Under the letter of intent, the Department of Commerce would receive an equity stake in Rigetti equal to the funding amount, issued at an implied price based on the lowest closing share price around the key dates, discounted by 15%. In plain language, the U.S. government is prepared to become a shareholder in Rigetti at a valuation that reflects its pre-surge trading level.

For many investors, this looks like validation that this technology and this company belong in the national strategic toolkit, not just in speculative portfolios.

Around the same time, Rigetti announced plans to invest up to $100 million in the United Kingdom to deploy a quantum computer with more than 1,000 qubits within the next three to four years. This is the company's first major investment outside the U.S., building on an existing 36-qubit system at the U.K.'s National Quantum Computing Center.