D-Wave's stock just spiked on fresh artificial intelligence (AI) news, but its sky-high valuation and limited revenue suggest quantum optimism may be running ahead of reality.Shares of D-Wave Quantum (QBTS 6.75%) spiked on Tuesday, finishing the day up 6.8%, but had jumped as much as 11.6% earlier in the day. The rise came as the S&P 500 (^GSPC -0.49%) and Nasdaq Composite (^IXIC -0.65%) lost 0.5% and 0.7%, respectively.D-Wave, a company developing quantum computing technology, announced the launch of a sui ...

Key Takeaways RGTI gained Air Force funding and launched Ankaa-3, aiming to reverse falling revenues and scale operations.QBTS posted 509% revenue growth, aided by its first Advantage system sale and growing QCaaS client base.Both holds strong cash positions but face losses, tough competition, and investor caution amid tech risks. Quantum computing is set to revolutionize the tech industry due to its advantages over traditional computing. In this context, two companies focused solely on quantum computing, R ...

Is this the next breakout tech stock? Or a high-risk hype play? Here's what investors should know before buying QBTS.D-Wave (QBTS 6.40%) is up 120% in 2025, driven by momentum involving its Advantage2 system and a major capital raise. But with negative cash flow and dilution concerns, is it the next tech rocket or a risky bet? I'll break down the facts so you can decide before Wall Street catches up.*Stock prices used were the market prices of Aug. 4, 2025. The video was published on Aug. 5, 2025. ...

Core Viewpoint - D-Wave Quantum Inc. has received new Buy ratings from analysts, indicating growing confidence in the company's future despite upcoming earnings that will clarify its revenue and profitability outlook [1][2]. Group 1: Analyst Ratings and Market Response - D-Wave Quantum received two new Buy ratings from Canaccord Genuity and Rosenblatt Securities, along with a price target increase from B. Riley [1]. - The company's stock price has shown volatility, with a 15% decline in the days surrounding the announcement of its new strategic initiative [7]. Group 2: Technological Developments - D-Wave announced a strategic initiative focused on cryogenic packaging, which is crucial for maintaining the quantum states of qubits [3][4]. - Cryogenic packaging could potentially enhance D-Wave's gate-model technology, addressing criticisms regarding its previous focus on annealing technology [6][9]. Group 3: Market Position and Future Outlook - Analysts suggest that gate-model quantum computing may have broader market appeal compared to D-Wave's current annealing approach, as seen with major tech firms like IBM and Alphabet focusing on gate-model [5]. - The upcoming Q2 earnings report on August 7, 2025, will be critical in assessing D-Wave's innovation and financial performance [2][10].

Group 1 - The quantum computing sector experienced significant gains, with Rigetti Computing (RGTI.US) rising over 9.8%, D-Wave Quantum (QBTS.US) increasing over 7%, Arqit Quantum (ARQQ.US) up over 6%, and Quantum Computing (QUBT.US) climbing over 5% [1] - Microsoft's CEO highlighted that quantum computing will be a crucial accelerator for cloud computing [1]

Core Insights - D-Wave Quantum Inc. has seen its stock price nearly double year-to-date, reaching new all-time highs, with investors anticipating insights from its upcoming earnings report in early August [1] - A significant portion of business leaders surveyed expect substantial returns on investment from quantum technology, indicating a strong market interest [2] Company Developments - D-Wave has made major sales of entire quantum computing systems, including its Advantage system, and has formed a partnership with SuperQ Quantum Computing Inc. and Verge Ag to expand its product lineup [3][4] - The collaboration aims to utilize quantum annealing technology to optimize agricultural operations, demonstrating the practical applications of D-Wave's technology [5][6] Market Position and Challenges - Despite the positive developments, D-Wave faces skepticism regarding the viability of quantum annealing compared to other quantum computing approaches, as highlighted by critics [7] - The recent collaboration has generated its first revenue contract, which may bolster D-Wave's position in the market [8] Revenue Growth Potential - The partnership with SuperQ and Verge serves as a model for future revenue generation, as D-Wave has relied heavily on a few high-profile sales to grow its revenue [9] - There is potential for D-Wave to collaborate with various partners across different sectors, leveraging its technology to create innovative products [11] Financial Outlook - Analysts have a mixed outlook on D-Wave's stock, with a 12-month price forecast averaging $15.22, indicating a potential downside of 17.14% from the current price [12] - Warning signs from the first-quarter earnings include a significant drop in deferred revenue and a cash burn nearing $20 million, contributing to a high short interest in the stock [13]

Core Insights - D-WAVE QUANTUM (QBTS) is scheduled to report its second-quarter 2025 results on August 7, with projected revenues of $2.52 million, reflecting a year-over-year increase of 15.7% [1][7]. Financial Performance - The consensus estimate for QBTS's earnings is a loss of 7 cents per share, unchanged over the past 90 days, compared to a loss of 10 cents per share in the same quarter last year [2][3]. - QBTS's earnings have exceeded the Zacks Consensus Estimate in one of the last four quarters, missed twice, and matched once, with an average negative earnings surprise of 65.28% [1]. Revenue Drivers - The anticipated general availability (GA) launch of the Advantage2 system is expected to positively impact second-quarter performance, offering significant technical upgrades for complex optimization and AI problems [4]. - D-Wave may have experienced an expansion in customer wins and production use cases, building on previous deployments at Ford Otosan and Japan Tobacco, which could contribute to revenue growth [5]. - Increased focus on AI and blockchain partnerships is likely to be reflected in the second-quarter update, with potential commercial agreements emerging from new quantum-powered solutions [6]. Market Performance - QBTS shares surged 97.3% in Q2, outperforming the broader Zacks Computer and Technology sector's rise of 20.4% and the Internet - Software industry's increase of 25.1% [9]. - Despite the strong stock performance, QBTS is currently trading at a high forward price/sales (P/S) ratio of 162.47X, significantly above its median of 82.17X and the sector's 6.71X [12]. Sequential Revenue Trends - A sequential revenue decline is expected in Q2 due to a one-time $12.6 million system sale in Q1, with revenues likely normalizing primarily from recurring streams [8].

Core Viewpoint - D-Wave Quantum, a quantum computing company, has experienced significant stock price fluctuations since its SPAC merger, currently trading around $17 after previously dropping below $1 in 2023 [1][2] Company Overview - D-Wave specializes in quantum annealing services and aims to leverage the growing demand for quantum computing as quantum processing units (QPUs) become smaller and more efficient [4][5] - The company designs its own QPUs and offers services through its cloud-based Leap platform, compatible with major cloud providers like Amazon Web Services and Microsoft Azure [6] Financial Performance - D-Wave's revenue has been modest, with $7.2 million in 2022 and projected to remain flat at $8.8 million in 2023 and 2024 [8] - Adjusted EBITDA has worsened from ($48.0 million) in 2022 to an estimated ($56.0 million) in 2024, while net income losses have increased from ($51.5 million) in 2022 to an estimated ($143.9 million) in 2024 [9] Customer Base and Revenue Model - The company has attracted over 100 major customers, including Deloitte and Mastercard, but most are engaged in low-revenue pilot programs rather than full-scale implementations [7][10] - D-Wave relies on cloud revenues for growth, which will require customers to commit to larger contracts and replace older analytics services with its quantum tools [10] Future Growth Projections - Analysts expect D-Wave's revenue to grow at a compound annual growth rate (CAGR) of 103% from 2024 to 2027, reaching $74.1 million, driven by higher-value hardware sales [12][13] - The launch of the Advantage2 quantum system, which is significantly more powerful and efficient, is anticipated to attract more customers and boost sales [14] Market Valuation - D-Wave's current market cap is $5.8 billion, equating to nearly 79 times its projected sales for 2027, suggesting a valuation that may not align with its growth potential [15] - If the company continues to grow at a CAGR of 30% post-2027, it could reach $125 million in revenue by 2029, potentially increasing its market cap to $9.9 billion if it maintains a high price-to-sales ratio [16] - Conversely, a more conservative valuation could see its market cap decline to $3.75 billion by 2028, indicating that while growth potential exists, stock performance may stagnate or decline [17]

Group 1 - Several stocks in the quantum computing sector, including IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing, are trading at historically high valuations, with significant price increases over the past year [1][2] - IonQ's stock has risen by 517%, while Rigetti, D-Wave, and Quantum Computing have surged by at least 1,500% as of July 21 [2] - The valuation multiples of these quantum computing stocks are significantly higher than those seen during previous market bubbles, such as the dot-com and COVID-19 bubbles [5][6] Group 2 - IonQ, Rigetti, D-Wave, and Quantum Computing are trading at historically high price-to-sales (P/S) multiples, raising concerns about a potential bubble [6][7] - Other AI companies exploring quantum computing, like Nvidia, Amazon, Alphabet, and Microsoft, have more reasonable valuation multiples compared to the smaller quantum computing players [6][7] - Recent capital raises by these companies, including IonQ's $1 billion stock issuance and Rigetti's $350 million capital raise, suggest management may be capitalizing on inflated market conditions [10][12] Group 3 - The quantum computing industry is characterized as research-heavy and capital-intensive, indicating that management's capital-raising efforts may reflect a belief that current price levels are unsustainable [12][13] - Historical trends suggest that a major correction could be imminent for smaller quantum computing stocks, as issuing stock to raise funds is not a sustainable long-term strategy [14] - For investors seeking exposure to quantum computing, it may be more prudent to consider diversified opportunities in larger tech companies rather than smaller, speculative players [15]

Industry Overview - The quantum computing sector has experienced strong stock gains due to significant technical and commercial advancements, indicating a shift from research to commercial viability [1][2] - Market focus is now on quantum computing's potential to fundamentally transform the technology sector, with a long-term value creation thesis emerging [2][16] Company Summaries D-Wave Quantum - D-Wave's stock is linked to its strategy of delivering immediate business value, with 81% of business leaders acknowledging the limits of classical computing for optimization [4][6] - The company reported a 509% year-over-year revenue growth in Q1 2025, driven by the sale of its Advantage2 system, showcasing its technology's effectiveness in real-world applications [6] Rigetti Computing - Rigetti's stock surged 30% following a breakthrough in achieving 99.5% two-qubit gate fidelity, significantly reducing error rates in its quantum computers [8][10] - The company is focused on developing a universal quantum computer, with its engineering strategy showing promising results in accuracy [9][10] Quantum Computing Inc. - Quantum Computing Inc. secured a major U.S. commercial contract for a quantum cybersecurity testbed, highlighting its disruptive potential with room-temperature integrated photonics technology [12][14] - The company's approach aims to provide more practical and cost-effective quantum systems, validated by its recent bank contract [13][14] Market Dynamics - The quantum sector's market valuations are based on future potential rather than current revenues, similar to early internet stocks, with an investment thesis centered on capturing a future market worth trillions [15][16] - Each company in the sector is pursuing distinct strategies: D-Wave focuses on near-term sales, Rigetti on long-term technological advancements, and Quantum Computing Inc. on practical hardware solutions [17]