Rigetti Soars 30% on Latest Quantum Leap: What It Means Long-Term

Key Points

• Rigetti Computing just made a key announcement that spiked shares up.
• However, beyond the stock's surge, what does this latest press release reveal about the company's strategy going forward?
• Break through the technological jargon to understand why this announcement is so big for the future prospects of Rigetti shares.

Quantum computing stock Rigetti Computing NASDAQ: RGTI had a massive day on July 16. Shares rose 30% after the firm announced, “Rigetti Demonstrates Industry’s Largest Multi-Chip Quantum Computer; Halves Two-Qubit Gate Error Rate.”

So, what does this actually mean, and why should quantum investors care deeply about this announcement? 

Monolithic vs. Multi-Chip: How Rigetti Is Taking a Step Back to Win Long-Term

In quantum computing, a big debate is whether to use a monolithic or multi-chip approach. A monolithic approach involves creating a massive single-chip quantum computer. The multi-chip approach uses several smaller chips. These chips connect through a process called tiling. Multi-chip, modular, and chiplet are different terms used to describe this approach. As the quantum computing industry grows, many firms are moving from a monolithic approach to a multi-chip one. Notably, this includes Rigetti itself, as well as International Business Machines NYSE: IBM.

After years of pursuing the monolithic approach, Rigetti now believes that the modular approach is the “right way to go in the long term." According to researchers at Northwestern University, “practical implementations of quantum computation will require millions of physical qubits." For context, IBM’s latest monolithic Condor chip only has 1,121 qubits. The Northwestern researchers suggest that scaling a monolithic chip to millions of qubits is “very expensive or entirely unrealistic by current standards." They argue that large-scale quantum systems will need to adopt a multi-chip/modular approach to achieve this.

For Rigetti, the announcement that it demonstrated the industry’s largest multi-chip quantum computer is a great sign. The tech company is pursuing and leading in the approach that these Northwestern researchers believe is more likely to result in a practical quantum computer. Continuing to stay ahead of the curve in the modular quantum approach could make Rigetti a huge winner over the coming years.

Growing the number of qubits is essential to creating a practical quantum computer. Thus, investors may feel alarmed that Rigetti’s latest modular system uses only 36 qubits. This may seem like a step back from the company’s “84-qubit single chip Ankaa-3 system." However, notice that Ankaa-3 is a “single chip," or monolithic system. Creating modular systems introduces different technological problems. Thus, the company has to work through these new issues, causing the number of qubits to fall. Essentially, Rigetti is taking a step back so that it can take many more steps forward in the future. This is highly positive for Rigetti’s ambitions to be one of the top players in the future of quantum computing.

Error Rates Fall, Setting RGTI Up For Bigger Announcements in 2025

Rigetti also stated it halved its “Two-Qubit Gate Error Rate." While growing the number of qubits is important, it is only relevant if the error rates in the system are staying the same or falling. So, it is an additional good sign that the new system halved the error rate versus Ankaa-3. Now, the company needs to increase the number of qubits while maintaining or further lowering error rates. That is exactly what Rigetti intends to do through the rest of the year.

Rigetti said its latest results keep it “on track to release its 100+ qubit chiplet-based system” with the same error rates of the 36-qubit system by the end of 2025. If achieved, this would likely be an even bigger milestone for the company. The number of qubits and the error rate would both be better than Ankaa-3. This would come while the company shifts to the modular approach, which many believe can beat out the monolithic approach in the long run.

The big takeaway? Rigetti is making strong progress toward leading the multi-chip quantum approach, which could pay off big time down the road. If it announces the completion of that +100 qubit system, Rigetti could also see another huge gain in shares in 2025.

Rigetti Is Making Big Moves, But Fierce Quantum Competition Will Continue

Overall, these developments are big wins for Rigetti. Still, the quantum computing industry is evolving rapidly, and at this point, no one truly knows which technology will win out in the end. However, the fact that IBM is also shifting to a modular approach validates Rigetti’s shift. It also introduces more competition for the company in this vertical.

Investors should pay close attention to announcements coming from the key players in quantum computing. Prematurely deciding who will win the technological battle could cause serious pain.