Peter is alluding here to Jesus’ resurrection from the dead, a resurrection God worked (1 Peter 1:21). If God raised Jesus from the dead, Jesus clearly was “chosen and precious” in God’s sight. From other portions of Scripture we know why Jesus was chosen and precious (including what Peter writes in 1 Peter 2:23–24), and hence worthy of resurrection. In the present passage Peter is simply contrasting people’s evaluation of Jesus (“rejected”) and God’s evaluation (“chosen and precious”).
4 As you come to him, a living stone rejected by men but in the sight of God chosen and precious,