Three Forces Behind Rigetti's 18% Stock Plunge in January 2026

Rigetti Computing (NASDAQ: RGTI) opened 2026 on a downbeat note, with its stock sliding 18% during the month. While the broader market context played a role, the decline reflects a convergence of company-specific headwinds and competitive pressure that rattled investor confidence in this speculative quantum computing play.

The past year had been a roller coaster for Rigetti shareholders—the stock nosedived early 2025, then surged more than 500% from its April lows before surrendering most gains by year-end. January’s pullback suggests that momentum may be fading as investors reassess the company’s near-term catalysts and competitive position.

The Product Delay and IonQ’s Counter-Move

Rigetti had set ambitious expectations heading into 2026 with plans to launch the Cepheus-1-108Q, its most powerful quantum computer system yet. Instead, the company announced a delay through at least the end of Q1, citing the need for additional refinement.

On paper, a few months’ postponement might seem routine. But in quantum computing, perception of technological progress is everything. The industry is engaged in a high-stakes race where multiple approaches compete to solve fundamental engineering challenges. Any stumble signals to investors that a company might fall behind in this critical development cycle.

Meanwhile, competitor IonQ made a strategic move that directly undermines one of Rigetti’s key advantages. IonQ closed a $1.8 billion acquisition to bring chip fabrication in-house—a vertical integration capability that Rigetti had positioned as a competitive differentiator. With IonQ now able to control its manufacturing pipeline, Rigetti’s claimed edge has become less distinctive, putting pressure on its investment narrative.

The Broader Tech Selloff Takes Its Toll

Rigetti didn’t face headwinds in isolation. The month of January proved challenging for speculative technology stocks broadly, as investors recalibrated expectations around artificial intelligence spending.

Microsoft’s January earnings report illustrated the tension gripping the sector. The company posted solid revenue and earnings growth, beating Wall Street on both metrics. However, the disclosure that Microsoft had already deployed $72 billion in capital expenditures through the first half of its fiscal year—with AI infrastructure consuming the lion’s share—raised eyebrows among investors.

The concern isn’t about Microsoft’s financial strength but rather about returns on that massive investment. Despite aggressive marketing and infrastructure buildout, AI adoption remains limited among end users. Cloud growth, the traditional engine of Microsoft’s expansion, is either flat or declining relative to prior years. This disconnect between spending intensity and visible economic returns has made investors anxious about the viability of the current AI boom narrative.

For speculative stocks like Rigetti with extreme valuations and no current profitability, any pullback in risk appetite creates immediate selling pressure. When growth investors lose confidence in the big players’ ability to monetize their investments, they tend to abandon smaller, higher-risk bets entirely.

The Valuation Question Looms

Rigetti’s stock decline reflects a fundamental reassessment of what quantum computing investors should be willing to pay today. The company remains deeply unprofitable with a valuation that can only be justified if meaningful commercial quantum applications materialize within the next few years.

The combination of product delays, competitive setbacks, and broader skepticism about speculative tech spending suggests the risk-reward profile has shifted. For most investors, waiting for more concrete evidence of Rigetti’s technological leadership—or evidence that quantum computing is approaching genuine commercial viability—may be the prudent approach.

The quantum race is far from over, and technological breakthroughs could still vindicate today’s believers. But January’s 18% decline underscores that the market is less forgiving of stumbles in this high-stakes competition.