Rigetti Computing (RGTI) has signed a letter of intent with the U.S. Department of Commerce for up to US$100 million in CHIPS Act funding over three years to accelerate superconducting quantum computing research.

The CHIPS Act funding news arrives during a sharp upswing in sentiment, with a 48.01% 7 day share price return and 65.95% 90 day share price return helping lift the latest price to US$26.42. At the same time, the 1 year total shareholder return of 88.45% and very large 3 year total shareholder return of more than 20x point to powerful but volatile momentum that has recently accelerated.

If this kind of quantum interest has your attention, it could be worth scanning a wider set of quantum computing opportunities through the 27 quantum computing stocks

With the stock up sharply and trading only about 11% below the latest analyst price target of US$29.24, the key question now is simple: is there still upside here, or has the market already priced in future growth?

Most Popular Narrative: 7.8% Overvalued

Rigetti Computing's latest close of $26.42 sits above the narrative fair value of $24.50, which frames the recent surge against a slightly richer pricing backdrop.

The trajectory of quantum computing, particularly in the context of Rigetti Computing and the Quantum Benchmark Testing System (QBTS), could witness significant shifts. Trump's emphasis on "America First" policies might lead to increased funding for public-private partnerships and the Defense Advanced Research Projects Agency (DARPA) R&D works in critical technologies, including quantum computing, as part of national security and technological supremacy initiatives.

Curious what kind of revenue ramp and profit margin shift would support that fair value, despite ongoing losses? According to LongTermer, the narrative leans on faster top line growth, improving cash efficiency and a richer future earnings multiple, all woven into a single valuation story that is not yet reflected in headline numbers.

Result: Fair Value of $24.50 (OVERVALUED)

However, this narrative can unravel if CHIPS Act support is delayed or reduced, or if Rigetti’s losses of US$225.72 million do not narrow meaningfully.

Next Steps

With the mix of optimism and concern so clear, it makes sense to review the data yourself and decide where you stand. If you want a quick shortcut to both sides of the story, check out the 1 key reward and 3 important warning signs

Looking for more investment ideas?

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• Hunt for early-stage potential by reviewing the 25 elite penny stocks with strong financials before the crowd catches on.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.