Core Insights - D-Wave Quantum Inc. has experienced a significant stock increase of 59.6% in May, outperforming the Internet Software industry's 16.2% and the S&P 500's 5.7% gains [1][4] - The stock rally is attributed to strong Q1 2025 financial results and notable technological advancements, including a recent demonstration of quantum supremacy [2][5] Financial Performance - In Q1 2025, D-Wave's revenues surged by 509% year over year, primarily due to the sale of the Advantage2 system to the Julich Supercomputing Center [5] - GAAP gross profit increased by 736%, while non-GAAP gross profit rose by 644% [5] - The net loss decreased to 2 cents per share, down from 11 cents per share in Q1 2024, marking the lowest loss since the company's public debut [6] Technological Achievements - D-Wave achieved quantum supremacy by using its 1,200-qubit Advantage2 prototype to simulate complex magnetic materials in minutes, a task that would take traditional supercomputers nearly a million years [7] - This breakthrough highlights the practical applicability of D-Wave's quantum annealing systems, distinguishing the company in a field often dominated by theoretical claims [7] Market Position and Growth Potential - D-Wave is the only company with production-level quantum applications in real-world use, with major clients including Ford Otosan, NTT DOCOMO, and Japan Tobacco [11] - The global quantum computing market is projected to reach $125 billion by 2030, growing at a CAGR of 36.9%, indicating strong long-term potential for D-Wave [16] Technical Indicators - D-Wave's stock is trading above both the 50-day and 200-day moving averages, suggesting a bullish trend and positive market sentiment [13]

Group 1 - The investor has a contrarian investment style, focusing on high-risk, illiquid options and shares, with a portfolio split of approximately 50%-50% [1] - The investment strategy involves buying stocks that have recently experienced sell-offs due to non-recurrent events, especially when insiders are purchasing shares at lower prices [1] - Fundamental analysis is employed to assess the health of companies, their leverage, and to compare financial ratios with sector and industry averages [1] Group 2 - Technical analysis is utilized to optimize entry and exit points, primarily using multicolor lines for support and resistance levels on weekly charts [1] - The investor conducts professional background checks on insiders who purchase shares after sell-offs to ensure credibility [1] - The investment timeframe typically ranges from 3 to 24 months, indicating a medium-term investment horizon [1]

Core Viewpoint - D-Wave Quantum Inc. has experienced a significant stock price increase of 683% over the past year, leading to divided opinions among investors regarding its future potential and valuation [1][2]. Financial Performance - D-Wave reported first-quarter revenue of $15 million, marking a year-over-year increase of over 500%, primarily driven by the sale of a quantum computing system [5]. - The company achieved a GAAP gross profit of $13.9 million, a record for the company, with a gross margin of 92.5%, up from 67.3% in the same quarter of the previous year [7][8]. - Despite a net loss of $5.4 million for the first quarter, this represents an improvement of $11.9 million compared to the same quarter last year [7]. Market Position and Investor Sentiment - There is a split among investors, with bullish investors optimistic about D-Wave's technological advancements, while bearish investors express concerns about the company's ability to sustain profitability and market excitement [1][3]. - The company's customer base grew, but it still only had 133 customers at the end of the quarter, and bookings decreased by nearly two-thirds year-over-year to $1.6 million [11]. Analyst Ratings and Price Targets - Following the earnings report, analysts from Benchmark and Needham & Co. raised their price targets for D-Wave, with a consensus price target of $10.17, indicating a potential downside of 7.23% from the current price [12]. - D-Wave's stock price currently exceeds analyst predictions, suggesting limited short-term upside potential [12].

Company Overview - D-Wave Quantum Inc. currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy) [3][4] - The company has shown significant price increases, with shares up 40.2% over the past week and 52.71% over the past month [6] - Over the last quarter, shares have risen 68.29%, and over the past year, they have increased by 682.48% [7] Industry Comparison - The Zacks Internet - Software industry has only increased by 1.33% over the past week and 14.73% over the past month, indicating D-Wave's strong performance relative to its peers [6] - In comparison, the S&P 500 has moved -3.09% over the past quarter and 13.39% over the past year, further highlighting D-Wave's outperformance [7] Trading Volume - D-Wave's average 20-day trading volume is 43,378,424 shares, which is considered a bullish sign given the rising stock price [8] Earnings Outlook - Over the past two months, 2 earnings estimates for D-Wave have moved higher, while none have moved lower, resulting in an increase in the consensus estimate from -$0.25 to -$0.21 [10] - For the next fiscal year, 2 estimates have also moved upwards with no downward revisions [10] Conclusion - Considering the strong momentum indicators and positive earnings outlook, D-Wave Quantum Inc. is positioned as a promising investment opportunity [12]

Core Viewpoint - D-Wave Quantum Inc. is positioned for significant growth and potential profitability in the quantum computing sector, driven by impressive earnings results and technological advancements [1][2]. Financial Performance - D-Wave's first-quarter loss decreased to $5.4 million from $17.3 million year over year, indicating improved financial health [2] - Revenues for the first quarter reached $15 million, a 509% increase from $2.5 million a year earlier, surpassing analysts' expectations of $10.5 million [2] Technological Advancements - D-Wave set a new revenue record by selling a $12.2 million quantum computing system to Germany's Jülich Supercomputing Centre, demonstrating the practical superiority of quantum computing [3] - The Advantage2 system can solve complex problems in 20 minutes, a task that would take supercomputers nearly 1 million years, showcasing D-Wave's technological edge [4] Market Position and Growth Potential - D-Wave has a strong cash balance of $304.3 million and notable customers like NTT Docomo and Mastercard, positioning the company for future profitability and expansion [5] - The superconducting quantum chip market is expected to grow at a CAGR of 17.2% from 2025 to 2034, indicating a favorable market environment for D-Wave [7] Investment Outlook - D-Wave's reduced losses and record revenues suggest positive long-term prospects, making it an attractive investment opportunity [6] - The stock is currently trading above both the short-term 50-day moving average and long-term 200-day moving average, indicating a bullish trend [8]

Company Performance - D-Wave Quantum's stock surged by 40.2% for the week, reaching a peak increase of 47.8%, despite the S&P 500 and Nasdaq 100 experiencing declines of 0.5% and 0.2% respectively [1] - The company reported a record revenue of $15 million for Q1 2025, marking a 509% increase from $2.5 million in the same quarter of the previous year [2] - CEO Alan Baratz described the quarter as "arguably the most significant in D-Wave's history," emphasizing the achievement of "quantum supremacy" over classical computing for a real-world problem [3] Trade Environment - President Trump announced a trade deal outline with the U.K., which includes provisions for intellectual property protection that could benefit D-Wave [4] - Trump also expressed interest in reducing tariffs on China, which could lead to de-escalation of trade tensions and positively impact the economy [4] Industry Outlook - Despite the positive developments, the scope of D-Wave's demonstration of "quantum supremacy" is limited, indicating that significant economic benefits from quantum technology are still a long way off [6] - For investors with high risk tolerance, D-Wave is considered a strong option among quantum stocks, but diversification across multiple quantum companies is recommended due to uncertainty in long-term success [7]

Core Viewpoint - Needham analyst Quinn Bolton reiterated a Buy rating on D-Wave Quantum Inc. (QBTS) and raised the price forecast from $8.50 to $13, following a significant revenue increase reported by the company [1]. Financial Performance - D-Wave reported revenue of $15 million for the quarter ended March 31, representing a more than sixfold increase year-over-year [1]. - The gross margin for the Advantage system sales was 93.6%, significantly exceeding the Street estimate of 74.3%, indicating higher profitability from system sales compared to QCaaS revenue [3]. Key Developments - The sale of the Advantage quantum computing system to a major research institution was a primary driver of the revenue boost [1]. - D-Wave completed the installation of its Advantage2 system at Davidson in Alabama, showcasing its operational progress [4]. - The company is actively pursuing partnerships in the quantum blockchain space to enhance its go-to-market strategy, which could lead to substantial system sales opportunities [5]. Market Interest - There has been an increase in commercial interest following D-Wave's quantum supremacy demonstration last quarter, indicating growing market confidence in the company's technology [4]. - Ford Otosan is advancing its deployment into production, with plans for expansion across multiple factories, reflecting the practical application of D-Wave's technology [5]. Future Outlook - D-Wave's expanding technology portfolio and focus on practical, commercial use cases are expected to drive stronger customer adoption and revenue growth [6]. - Despite the positive developments, the company remains EBITDA-negative, suggesting that investors should anticipate ongoing dilutive financing rounds until it reaches EBITDA break-even [6].

Revenue and Income - Revenue for the three months ended March 31, 2025, increased by $12.5 million, or 509%, to $15.0 million compared to $2.5 million for the same period in 2024, primarily driven by system sales of $12.6 million[122]. - Other income increased by $1.0 million or 89%, reaching a net other income of $2.2 million for the three months ended March 31, 2025, compared to a net other expense of $1.1 million for the same period in 2024[131]. Net Loss and Expenses - Net loss for the three months ended March 31, 2025, was $5.4 million, a decrease of $11.9 million, or 69%, compared to a net loss of $17.3 million for the same period in 2024[121]. - Research and development expenses increased by $1.8 million, or 21%, to $10.3 million for the three months ended March 31, 2025, compared to $8.5 million for the same period in 2024[124]. - Sales and marketing expenses rose by $3.8 million, or 124%, to $6.9 million for the three months ended March 31, 2025, compared to $3.1 million for the same period in 2024[126]. - Total operating expenses increased by $6.0 million, or 31%, to $25.2 million for the three months ended March 31, 2025, compared to $19.2 million for the same period in 2024[121]. - Cost of revenue increased by $0.3 million, or 39%, to $1.1 million for the three months ended March 31, 2025, compared to $0.8 million for the same period in 2024, primarily due to system sales-related costs[123]. Cash Flow and Financing - Net cash used in operating activities was $19.3 million for the three months ended March 31, 2025, an increase of $7.2 million from $12.1 million for the same period in 2024[141]. - Net cash provided by financing activities was $145.6 million for the three months ended March 31, 2025, an increase of $146.3 million from $(0.7) million for the same period in 2024, primarily due to $146.1 million from the issuance of common stock under the $150M ATM[143]. - Net cash used in investing activities was $0.5 million for the three months ended March 31, 2025, a decrease of $0.7 million from $1.2 million for the same period in 2024[142]. - The Company entered into a new at-the-market sales agreement for up to $150.0 million on January 10, 2025, with net proceeds of $146.1 million received as of March 31, 2025[135]. Debt and Liabilities - The accumulated deficit as of March 31, 2025, was $632.4 million[107]. - Interest expense decreased by $0.9 million, or 80%, to $0.2 million for the three months ended March 31, 2025, compared to $1.1 million for the same period in 2024[127]. - The fair value of warrant liabilities decreased to $3.9 million for the three months ended March 31, 2025, compared to an increase of $2.7 million for the same period in 2024[130]. - The Company successfully repaid the entire Term Loan of $30.0 million and $4.3 million in accrued PIK interest on October 22, 2024[138]. - As of March 31, 2025, D-Wave had zero issuance capacity under both the $100M ATM and $75M ATM agreements[133][134]. Future Outlook - The company expects to continue incurring significant losses as it invests in research and development and various go-to-market initiatives[107]. - As of March 31, 2025, D-Wave had $37.8 million of issuance capacity under the Lincoln Park Purchase Agreement[132]. - The Company did not issue any Common Shares to Lincoln Park under the Purchase Agreement during the three months ended March 31, 2025[132]. Exchange Rate Impact - The effect of exchange rate changes on cash and cash equivalents was an increase of $0.5 million for the three months ended March 31, 2025[139].

Core Insights - D-Wave Quantum Inc (QBTS) and IONQ Inc (IONQ) reported smaller-than-expected losses and revenue beats for Q1, leading to significant stock price increases [1] - IONQ received a price-target increase from Morgan Stanley to $30, while Needham reduced its target to $50 [1] Company Performance - QBTS shares surged by 39.9% to $9.64, marking the highest level since late March and a year-over-year increase of 598% [2] - IONQ shares rose by 2.2% to $29.80, with a year-over-year gain of 239.3% [3] Technical Analysis - QBTS is bouncing off support from the 100-day moving average, aiming to end a three-day losing streak [2] - IONQ is approaching a long-term resistance level at $32, having reached its highest price since February [3] Options Activity - There is significant call option activity for both companies, with QBTS call volume at 16 times and IONQ at four times the intraday average [4] - The most popular call contract for QBTS is the May 10 call, while for IONQ it is the July 30 call [4]

Company Performance - D-Wave Quantum Inc. reported a quarterly loss of $0.02 per share, better than the Zacks Consensus Estimate of a loss of $0.05, and an improvement from a loss of $0.11 per share a year ago, representing an earnings surprise of 60% [1] - The company posted revenues of $15 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 38.05%, compared to revenues of $2.47 million in the same quarter last year [2] - Over the last four quarters, D-Wave Quantum has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Stock Outlook - D-Wave Quantum shares have declined approximately 18% since the beginning of the year, while the S&P 500 has decreased by 4.3% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.07 on revenues of $4.43 million, and for the current fiscal year, it is -$0.25 on revenues of $23.29 million [7] Industry Context - The Internet - Software industry, to which D-Wave Quantum belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly impact stock performance [5][8]