Vanguard Owns 36 Million Shares of Rigetti Computing. Here’s Why That $577 Million Position Doesn’t Mean What You Think It Does.

If you follow quantum computing stocks, you’ve probably seen some version of this headline: “Wall Street is Loading Righetti Calculation (NASDAQ: RGTI)” The article may point to 13F filings showing that leading fund managers like Vanguard Group, BlackRockand state street Pure play holding tens of millions of shares.

At first glance, this seems like a huge endorsement. Vanguard, the world’s largest asset management company, holds a stake worth about $577 million in Rigetti. This must mean something, right?

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But in fact, Vanguard’s large holding in Rigetti has nothing to do with the fund manager’s beliefs. It exists because the stock is part of a broad index, e.g. Russell 2000. Vanguard offers a number of passively managed funds – e.g. Vanguard Small Cap Index Fund –Track specific indexes. This means holding every stock in that benchmark index in the same proportion, or weight, as the index.

When Rigetti’s stock price surges more than 1,700% in 2025, its weighting in these indexes increases, and the value of Vanguard’s holdings grows proportionally, so does its weighting in these funds’ portfolios.

So do BlackRock, State Street and Geode Capital, along with most of Rigetti’s largest institutional holders.

There are exceptions. Some active hedge funds, such as DE Shaw, also hold large positions in Rigetti.

But these positions do not amount to support either. DE Shaw is a quant fund: it uses algorithms to trade based on momentum and other factors that have little to do with anyone’s long-term belief in the stock or belief in the company’s ability to execute its vision.

Funds that buy stocks with the intention of holding them for the long term have small Rigetti positions — less than 0.01% of their portfolios — that are closer to rounding errors.

Institutional ownership data is one of the most widely misunderstood signals in retail investing. Having a name like Pioneer on the shareholder list feels like validation, but it’s not. This is a mechanical result of index inclusion, not a reflection of “smart money” loving Righetti.

So, should you buy Rigetti stock? I wouldn’t unless you allocate funds that you are willing to lose. I think the road to potential success for Rigetti and other areas of quantum computing will be long—much longer than many industry bulls hope. If I’m right, these risks could be life-or-death for Rigetti and many of his peers.