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]

Key Takeaways QBTS stock is up 141.7% YTD, driven by Advantage2 advances and growing commercial client interest. D-Wave's Q1 revenue hit $15M, a 509% jump YoY, exceeding all 2024 sales, with 133 customers this quarter.NVDA reported $44.1B in Q1 revenue, up 69% YoY, fueled by AI-driven demand in data centers and cloud services.NVIDIA Corporation’s (NVDA) shares have risen 27.1% so far this year, mainly due to its advances in artificial intelligence (AI). Meanwhile, D-Wave Quantum Inc. (QBTS) has seen an even ...

Core Insights - D-Wave Quantum (QBTS) and IonQ (IONQ) are leading companies in the quantum computing sector, each with distinct strategies and technologies aimed at transforming computing architectures [1][2] Group 1: D-Wave Quantum (QBTS) - D-Wave has successfully evolved its Advantage2 system from a prototype with over 1,200 qubits to a production-ready system with over 4,400 qubits, achieving a 40% increase in energy scale, 75% noise reduction, and 2x coherence [3][7] - The company reported significant financial improvements in Q1 2025, with GAAP gross profit rising to $13.9 million from $1.7 million year-over-year, resulting in a GAAP gross margin increase to 92.5% from 67.3% [4][7] - D-Wave raised $400 million in early July 2025, boosting cash reserves to approximately $815 million for R&D and strategic growth initiatives [6][7] - Year-to-date, D-Wave's stock has surged 141.6%, outperforming the S&P 500's 8.5% increase [14] Group 2: IonQ (IONQ) - IonQ is focusing on building a vertically integrated quantum platform through acquisitions, including Lightsynq and Capella Space, to enhance capabilities in quantum technologies [8] - The company reported revenues of $7.6 million in Q1 2025, with a reduced net loss of $32.3 million compared to $39.6 million in the same quarter of 2024 [9][11] - IonQ's cash reserves were bolstered to approximately $1.68 billion following a $1 billion equity offering, aimed at funding R&D and commercialization efforts [11] - IonQ's stock has seen a modest increase of 3.6% year-to-date, underperforming compared to D-Wave and the broader market [14] Group 3: Comparative Outlook - D-Wave's strong near-term performance and margin improvements position it favorably for potential gains in 2025, while IonQ's long-term vision may take longer to materialize due to slower revenue growth and larger losses [17]

For example, Ford Otosan, a joint venture between Ford Motor (F 1.74%) and Koç Holding in Turkey, is using D-Wave's technology to streamline its manufacturing processes. The company has reduced the scheduling time by 6 times for its Ford Transit vehicles. D-Wave Quantum also has other big customers. Accenture (ACN -0.31%), BASF (BASFY), Lockheed Martin (LMT 2.09%), Mastercard (MA 0.56%), and Pattison Food Group are just a few of the large customers using its quantum computing technology. The company's growt ...

Does the quantum computing stock deserve its recent run-up?Shares of D-Wave Quantum (QBTS 14.89%) are jumping on Wednesday, up 10.5% as of 2:50 p.m. ET. The rise comes as the S&P 500 and Nasdaq Composite gained 0.7% and 0.5%, respectively.D-Wave, a company developing quantum computing technology, is riding momentum in the broader quantum market as its stock receives a price target upgrade from a Wall Street analyst.This analyst is bullishAn analyst at the investment bank B. Riley Financial increased their p ...

D-Wave Quantum TodayQBTSD-Wave Quantum$18.39 -0.50 (-2.63%) 52-Week Range$0.75▼$20.56Price Target$14.38Add to WatchlistDespite tripling in value in the last six months, shares of D-Wave Quantum Inc. NYSE: QBTS seemed to be rallying once again with an increase of nearly 26% over a five-day period in mid-July 2025. This surge comes after D-Wave shares traded mostly horizontally for about two months starting in mid-May. Rivals including Quantum Computing Inc. NASDAQ: QUBT and IonQ Inc. NYSE: IONQ rose as well ...