Ark's Quantum Warning: Bad News Signals for Rigetti and the Industry

Cathie Wood’s Ark Investment Management just issued a sobering forecast that amounts to bad news for quantum computing investors, particularly those betting on companies like Rigetti Computing. The firm’s 2026 “Big Ideas” report suggests that quantum computers remain decades away from practical commercialization—far longer than many bullish investors expect. For a company trading at astronomical valuations, this bad news could reshape expectations.

The Sobering Reality Behind Rigetti’s Technical Progress

Rigetti Computing has established itself as a leader in the quantum race through impressive technical achievements. The company owns its own fabrication facility, developed its custom programming language Quil, and built a cloud platform offering quantum computing capacity to enterprise clients. Unlike competitors, Rigetti controls its entire supply chain, allowing faster deployment of updated systems. The company recently constructed Cepheus-1-36Q, an industry-leading multichip quantum computer boasting a 99.5% fidelity rate—a measure of operational accuracy.

Yet here lies the paradox: despite these technological milestones, Rigetti’s commercial reality remains bleak. During the first three quarters of 2025, the company generated just $5.2 million in revenue—a minuscule figure for an organization valued at $5 billion. Even with planned advances (150-qubit systems by late 2026 with 99.7% fidelity, followed by 1,000-qubit systems in 2027 with 99.8% fidelity), the revenue story remains problematic because quantum systems still contain too many errors for most practical applications.

Ark’s Decade-Long Forecast: When Quantum Computing Will Matter

The bad news deepens when examining Ark’s timeline analysis. According to the firm’s research, Alphabet’s quantum efforts are doubling qubit capacity and reducing error rates by 40% every four years. At this pace, quantum computers won’t achieve sufficient power and accuracy to compromise RSA-2048—the encryption standard protecting most internet infrastructure—until 2063. That’s four decades away.

However, Ark believes there’s a faster path: if the industry can accelerate progress to achieve similar improvements every two years instead of every four, quantum computers might become useful for cryptographic applications by 2044. Even with this optimistic scenario, practical commercialization remains 18 years distant.

Rigetti’s own projected trajectory looks impressive: the company expects to increase qubits roughly seven-fold while cutting error rates by around 33% between 2026 and 2027 alone. But this highlights a critical problem—such dramatic progress becomes exponentially harder to maintain over time. Scaling quantum systems faces fundamental physics constraints that prevent companies from sustaining rapid improvement curves indefinitely.

Valuation Mismatch: Why Rigetti Stock Carries Significant Risk

The bad news for investors extends to the company’s stock valuation, which appears completely disconnected from financial reality. Despite a 71% decline from its peak, Rigetti stock has delivered a jaw-dropping 1,550% three-year return. Yet the company trades at a price-to-sales ratio of 617—among the most expensive valuations in technology. For perspective, Nvidia, an AI powerhouse generating billions in annual revenue, trades at just 24x sales.

This extreme valuation assumes Rigetti will eventually capture enormous market value from quantum computing. However, given that Ark expects decades before quantum systems become commercially viable at scale, the company faces a long period of minimal revenue growth. The market may be pricing in a future that doesn’t arrive as quickly—or at all.

The Bottom Line: Separating Hype from Quantum Reality

The bad news encapsulated in Ark’s report serves as a reality check for the quantum computing sector. While the technology’s potential remains genuine, the timeline to meaningful commercial impact extends far beyond typical market expectations. Rigetti represents the cutting edge of quantum hardware development, but cutting-edge innovation alone doesn’t justify current valuations when commercialization remains decades away.

For investors considering Rigetti or similar quantum plays, the lesson is clear: evaluate whether you can afford to wait 15-20+ years for technological promises to materialize, all while accepting that quantum systems may not achieve the transformative impact some envision.