The Emperor's New Quantum Clothes
Now they are here, now they are not
Hello traders,
Today we will be looking at a couple Quantum Computing companies in detail.
NEW: Audio Summary of the post here so people who do not like to read(why??) can also enjoy it.
The Quantum Conundrum
![Quantum Computing Memes for QMA-Complete Teens on X: "Fig. 1.54: A meme [1]. [1] Quantum Computing Memes for QMA-Complete Teens, Quantum Physics and Memology (2019). Current quantum computing. Joke shamelessly stolen from](https://substackcdn.com/image/fetch/$s_!cK2M!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa624ebe5-9de9-4c02-9db3-4f64269f45eb_497x571.png "Quantum Computing Memes for QMA-Complete Teens on X: \"Fig. 1.54: A meme [1]. [1] Quantum Computing Memes for QMA-Complete Teens, Quantum Physics and Memology (2019). Current quantum computing. Joke shamelessly stolen from")
D-Wave Quantum (QBTS): D-Wave is a pioneer of a specialized approach known as "quantum annealing". This method is not designed for universal computation but is specifically tailored to solve complex optimization problems by finding the lowest energy state of a system. While the company has impressively demonstrated what it calls "quantum supremacy" on a specific, useful problem and has generated more revenue than its peers, its annealers cannot run the broad class of algorithms (like Shor's algorithm for factoring) that a universal quantum computer could. Its technological path is powerful but fundamentally niche.
Rigetti Computing (RGTI): Rigetti is pursuing the more mainstream gate-based model of quantum computing, using superconducting transmon qubits. This is the same fundamental technology being pursued by deep-pocketed giants like Google and IBM. This approach is, in theory, capable of universal quantum computation. However, it is plagued by immense technical challenges, including high error rates, short qubit coherence times (the duration for which a qubit can maintain its quantum state), and the need for cryogenic operating temperatures. Rigetti's primary claimed differentiator is its vertically-integrated, "full-stack" model, where it controls the entire process from chip fabrication in its own facility to cloud-based access for users.
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*NOT A SCIENCE LESSON ALGO GET TO THE POINT*
From a trader’s perspective, this technological debate is largely a distraction. The science is irrelevant to the investment thesis because neither approach has produced a profitable or scalable business model.
Both D-Wave and Rigetti are facing the same insurmountable near-term commercialization hurdles. The technological distinctions are purely academic when the financial results are identically poor. Both are different paths leading to the same unprofitable destination.
THE FINANCES(OR THE LACK THEREOF)
Rigetti Computing (RGTI): The company's financial situation is particularly precarious. In the first quarter of 2025, it generated a mere $1.5 million in revenue while incurring $22.1 million in operating expenses, resulting in a substantial operating loss. For the full year 2024, the company reported a staggering net loss of $201 million on revenues of only $10.8 million. Rigetti is perpetually burning cash and is completely reliant on external funding to continue its operations. This dependency is highlighted by its recent capital raises, including a $35 million strategic investment from Quanta Computer and a $350 million at-the-market equity offering. The company's accumulated deficit as of 2024 stood at a breathtaking $554.7 million.
D-Wave Quantum (QBTS): While D-Wave showed an impressive spike in revenue to $15.0 million in Q1 2025, this was largely driven by a one-time sale of a system to a research center and is not representative of a recurring revenue stream. Its historical revenue is minuscule, totaling just $8.8 million for the entirety of 2024. The company remains deeply unprofitable, posting a trailing twelve-month net loss of $143.9 million. Its cash position has also dwindled significantly, falling from $304 million to just $27.3 million in the year ending Q1 2025, a clear indicator of its high cash burn rate.
The business model for both of these companies is not selling quantum computing services; it is selling stock to the public.
Their primary and most essential corporate activity is raising capital to fund their ongoing R&D. With massive accumulated deficits and relentless cash burn, they are running on a treadmill of shareholder dilution. D-Wave completed a $150 million at-the-market offering in January 2025, and Rigetti followed with its own large offering in June 2025. This is the inevitable and painful future for shareholders: as the initial hype fades and cash reserves run low, the companies will be forced to issue more and more new shares, creating a relentless downward pressure on the stock price over the long term
SO DO I BLINDLY GO AHEAD AND SHORT THESE COMPANIES?
WELL NO. For starters, RGTI went up 15.45% yesterday on no news catalyst!
Positioning Guide
Maintain a short bias with patience. This is a slow bleed rather than a sudden rug pull. Mid next year OTM puts.
Size carefully; borrow fees are very high
Hedge with a broader AI-hardware basket; correlation spikes when tech sells off.
Our broader target for RGTI is $3.22 and QBTS is $5.68
That’s about it from me and see you all in chat.- Fin
Thanks sir. Always appreciate the alpha. Audio is easier to comprehend than reading for some people. Also nice for driving or if you don’t want to use a device.