Rigetti(RGTI) Stock; Slips as Quantum Hardware Boom Meets Customer Concentration Risk

TLDRs;

• Rigetti shares fell after investors focused on customer concentration despite strong hardware-driven revenue growth.
• Quantum hardware generated nearly 80% of revenue, marking a major shift from research services.
• Two customers contributed about 80% of quarterly revenue, raising concerns about sales diversification.
• Analysts remain bullish, but expanding the customer base is now critical for sustaining momentum.

Rigetti Computing (NASDAQ: RGTI) shares moved lower in after-hours trading on August 6 after the company reported a sharp jump in second-quarter revenue, as investors looked past the headline growth and focused on a more pressing issue: the business remains heavily dependent on a very small number of customers.

The quantum computing company said revenue climbed 185% year over year to $5.14 million, driven primarily by sales of quantum hardware systems. The results highlighted meaningful progress in Rigetti’s commercialization efforts, but the market reaction suggested that concerns over concentration risk and rising operating losses outweighed the revenue beat.

The stock closed the regular session at $16.53, down 1.5%, and later slipped to around $15.80 in extended trading, a decline of roughly 4.4%.

Hardware Sales Take Center Stage

The most significant change in Rigetti’s quarter was the composition of its revenue. Hardware and related components contributed $4.10 million, representing nearly 80% of total revenue. A year earlier, the company generated no hardware revenue, relying mainly on research and service activities.

Rigetti Computing, Inc., RGTI

That shift suggests Rigetti is beginning to transition from a research-oriented business toward selling commercial quantum systems. Higher-margin Novera system sales also helped improve gross margin to 42.6%, up from 31.4% in the same period last year.

Management indicated that expanding on-premises deployments is becoming a larger part of the company’s strategy, with hardware sales increasingly replacing lower-margin research revenue.

Buyer Dependence Raises Concerns

Despite the progress, investors focused on a key vulnerability: two customers accounted for roughly 80% of total quarterly revenue.

The concentration became even more pronounced compared with the prior year, when the two largest customers represented about 66% of revenue. While government-related revenue fell sharply as a share of total sales, commercial diversification has not yet broadened enough to reduce dependence on a handful of buyers.

For a company valued in the billions of dollars, such reliance on a small customer base raises questions about the durability of future growth. A delay, cancellation, or reduction in orders from one of those customers could have a significant impact on quarterly results.

Rigetti also cautioned that system deliveries may cause substantial fluctuations in revenue from one quarter to another, reinforcing concerns that the latest surge may reflect a strong shipment period rather than a stable long-term growth trajectory.

Losses Continue Expanding

Total operating expenses increased 48% to $30.25 million, while operating loss widened 41% to $28.06 million. Research and development spending rose more than 53% as the company continued investing aggressively in its technology roadmap.

Rigetti reported a non-GAAP net loss of $15.98 million, or $0.05 per share, roughly in line with analyst expectations.

The company ended June with $541.3 million in cash and investments and no debt, giving it a relatively strong liquidity position compared with many early-stage technology firms. However, cash burn remains significant, with $32 million used in operating activities during the first half of 2026.