Rigetti Computing's stock rallied sharply, climbing nearly 12% in early trading Monday following the announcement of a new joint venture with Hewlett Packard Enterprise and the Pittsburgh Supercomputing Center. The collaboration, dubbed TangleLab, aims to build a pioneering hybrid quantum-classical supercomputing testbed.

Funded by a $5 million grant from the National Science Foundation, TangleLab will integrate Rigetti's 9-qubit Novera quantum processing unit with PSC's existing high-performance classical computing infrastructure. Construction is slated to start September 1, 2026, with full operational capacity expected by 2027.

Strong federal backing propels Rigetti's ambitions

Rigetti's partnership with HPE and PSC deepens its ties in the quantum-HPC space, a relationship first expanded at HPE’s Discover 2026 conference this past June. This latest initiative builds on previous government support: in May, Rigetti signed a letter of intent with the U.S. Department of Commerce that could release up to $100 million in funding over three years, including potential equity participation from the government.

Alongside these efforts, Rigetti holds an $8.4 million contract with India’s Centre for Development of Advanced Computing, expected to be fulfilled in late 2026. The company also has ambitious plans to deliver a large-scale system exceeding 1,000 qubits in the UK within three to four years, which could reshape its market position if completed on schedule.

On the financial front, Rigetti posted $4.4 million in revenue for Q1 2026 while investing nearly $20 million in research and development. The company, flush with $569 million in cash and short-term assets, is set to report Q2 earnings on August 6, with analysts forecasting revenue growth to about $5.09 million substantially higher than last year’s $1.8 million in the same quarter.

Despite the strong growth prospects and positive analyst sentiment, with an average price target of $31.60 on a consensus buy rating, Rigetti's path to profitability remains challenging. Revenue still lags far behind the company's R&D expenses, and reliance on government contracts means potential dilution risks for shareholders.

Rigetti's stock remains well below its October peak near $56, trading around $15 even after Monday's rally. The broader market also lent a hand, as major indexes rose moderately S&P 500 up 0.7%, Dow increasing 1.1%, and Nasdaq adding 0.7% which supported interest in quantum computing equities.