TD Cowen revised its stance on two public players in the nascent quantum computing market, trimming its view on Rigetti Computing while commencing coverage of D-Wave Quantum with an optimistic outlook.
Rigetti: rating cut and funding concerns
The brokerage downgraded Rigetti from Buy to Hold, citing a more balanced risk profile despite the company making progress on its technology roadmap. TD Cowen restated that Rigetti remains on schedule to deliver a processor exceeding 1,000 qubits by 2027. However, the firm noted the schedule for a 108-qubit chip has slipped by one quarter to early 2026.
TD Cowen emphasized potential capital requirements tied to a proposed fabrication facility that could exceed $300 million. That possible outlay was compared against roughly $525 million in cash on hand and an annual cash burn TD Cowen estimates at $70 million to $80 million. The brokerage said a decision on whether to proceed with the facility may be required by mid- to late-2026.
Competition also factored into the downgrade. TD Cowen highlighted that Rigetti was not selected for the next stage of a U.S. defense quantum benchmarking program, a development that could constrain access to both funding and technical collaboration. The firm added that, even after a significant drop in the stock price, Rigetti’s valuation is still elevated relative to peers, while its revenue generation and customer wins lag those competitors.
TD Cowen left its near-term forecasts largely intact, projecting a revenue recovery in 2026 that would be supported by funding from the U.S. Department of Energy and a modest number of system orders.
D-Wave: initiated with Buy on growth and technology moves
In contrast, TD Cowen began coverage of D-Wave with a Buy rating. The brokerage attributed the positive view to D-Wave’s position in quantum annealing technology and what it described as early commercial traction through system sales and cloud-based services.
TD Cowen expects D-Wave’s revenue to expand at an annual pace north of 70% from 2025 through 2028, driven by enterprise demand and the company’s push into additional use cases. The firm also noted that D-Wave’s acquisition of assets from Quantum Circuits Inc. could speed up the development of its superconducting gate technology and broaden the market the company can address.
Nonetheless, TD Cowen cautioned that manufacturing and scaling remain material risks for D-Wave, a caveat it said could affect the company’s ability to execute on the growth trajectory it anticipates.
What this means for markets and sectors
- Public quantum computing companies face near-term capital and execution risks that investors will likely weigh against valuation.
- Government programs and Department of Energy funding can materially influence revenue paths for early-stage quantum vendors.
- Advances or setbacks in manufacturing and scaling technologies directly impact addressable markets and commercial rollout timelines.