D-Wave Quantum Faces Significant Risks Amidst Stock Surge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
0mins
Should l Buy QBTS?
Source: Fool
- Minimal Revenue: D-Wave reported only $3.7 million in sales for the third quarter against a staggering net loss of $140 million, highlighting a significant gap between revenue and losses, indicating severe challenges in achieving profitability.
- Bleak Market Outlook: Despite the optimistic outlook for quantum computing, industry giants like Alphabet suggest that substantial commercial sales may still be 5 to 10 years away, implying that D-Wave's investment returns could be delayed significantly.
- Rising Operating Costs: D-Wave's operating expenses surged by 40% in the third quarter to $30.4 million, and while the company has $836 million in cash reserves, the rapid increase in spending could quickly deplete these funds, adding financial pressure.
- Valuation Risks: With a price-to-sales (P/S) ratio of 280, significantly higher than the tech sector's average of 9, D-Wave's high valuation amidst minimal sales and substantial losses indicates that investors are facing considerable risks.
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Analyst Views on QBTS
Wall Street analysts forecast QBTS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for QBTS is 40.67 USD with a low forecast of 35.00 USD and a high forecast of 48.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
13 Buy
0 Hold
0 Sell
Strong Buy
Current: 17.210
Low
35.00
Averages
40.67
High
48.00
Current: 17.210
Low
35.00
Averages
40.67
High
48.00
About QBTS
D-Wave Quantum Inc. is a quantum computing company, which is engaged in the development and delivery of quantum computing systems, software, and services. The Company builds and delivers systems, cloud services, application development tools, and professional services to support the end-to-end quantum computing journey for enterprises and developers. The Company's products include Cloud Platform, Systems, Professional Services, and others. Under its Cloud Platform, the Leap quantum cloud service delivers immediate, real-time access to its quantum computers and hybrid solvers services. Under its Systems, the Advantage quantum system is a quantum computer designed for business. It also offers quantum applications to a range of customers, including resource scheduling, factory scheduling, industrial construction design, drug discovery, and others. It offers solutions across workforce scheduling, production scheduling, vehicle routing, resource optimization, and cargo loading.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
D-Wave Quantum Acquires QCI to Advance Quantum Computing
- Acquisition Strategy: D-Wave Quantum's acquisition of Quantum Circuits Inc. for $550 million, comprising $300 million in stock and $250 million in cash, aims to bolster its competitive edge in quantum computing, despite generating only $22 million in revenue over the first nine months of 2025, indicating a high-risk investment profile.
- Market Reaction: Although the acquisition is viewed as a transformative opportunity, D-Wave's stock fell 18.9% in January, reflecting market concerns about its future growth potential, prompting investors to carefully assess its valuation exceeding $7 billion.
- Technology Integration: This acquisition combines D-Wave's leading quantum annealing system with QCI's full-stack superconducting gate-model quantum computing systems, aiming for commercial scalability and advancing general-purpose fault-tolerant computing, thereby enhancing decision-making efficiency and operational optimization.
- Investment Risks: While D-Wave holds potential in quantum computing, its future success is uncertain, and investors should be aware of the potential for stock price volatility due to slow sales growth or insufficient technological advancements, suggesting that only risk-tolerant investors should consider holding this stock.
See More
Quantum Computing Industry Holds Massive Potential
- Market Potential Forecast: According to McKinsey, by 2035, the quantum computing market could generate annual revenues between $28 billion and $72 billion, with a 90% market share potentially leading to $45 billion in revenue for a leading company, highlighting significant market opportunities.
- Divergent Technology Paths: IonQ employs a trapped ion approach using lasers to cool atoms for quantum computing, while D-Wave utilizes quantum annealing focused on optimizing complex problem solutions, with both technologies offering unique advantages that could shape future market dynamics.
- Investment Return Potential: If either D-Wave or IonQ achieves $45 billion in annual revenue, their market caps could soar to $400 billion, translating to a potential gain of 5,233% for D-Wave and 2,885% for IonQ, indicating the high returns possible from investing in these companies.
- Risks and Opportunities: Despite the optimistic outlook for quantum computing, the path to success is fraught with challenges, and investors should carefully manage their positions; even a 1% initial investment could yield over 2,000% returns in the future, becoming a significant driver of portfolio gains.
See More
Investment Potential and Risks in Quantum Computing
- Massive Market Potential: McKinsey projects that by 2035, the quantum computing market could generate annual revenues between $28 billion and $72 billion, and if either IonQ or D-Wave captures a 90% market share, it could lead to $45 billion in annual revenue, highlighting significant investment upside.
- Diverse Technological Approaches: IonQ employs a trapped ion method that uses lasers to cool atoms for quantum computing, while D-Wave focuses on quantum annealing to solve optimization and sampling problems, indicating that the future market competition will hinge on the maturity of these technologies.
- Significant Investment Risks: Although both companies could potentially deliver over 1,000% returns, the nascent stage of quantum computing and intense competition necessitate caution, with a recommendation for investors to limit initial positions to 1% of their portfolios to mitigate risks.
- Intense Market Competition: The success of IonQ and D-Wave in the quantum computing sector is not guaranteed, as other competitors exist, prompting investors to stay informed about industry developments to adjust their investment strategies accordingly.
See More
D-Wave Quantum's Acquisition of QCI to Propel Development
- Quantum Computing Potential: Quantum computing holds transformative potential across industries such as pharmaceuticals, materials science, finance, and cybersecurity, with expectations for breakthroughs in production and deployment by 2025, addressing problems classical computers cannot solve.
- Acquisition of QCI: D-Wave's acquisition of Quantum Circuits Inc. for $550 million, comprising $300 million in stock and $250 million in cash, strategically positions the company to balance its commercial annealing quantum systems with the development of scalable gate-model quantum computers for general-purpose, fault-tolerant computing.
- Financial Health: Despite generating only $22 million in revenue over the first nine months of 2025, D-Wave's revenue has more than tripled year-over-year, and with a cash balance of $836.2 million as of September 30, 2025, the company demonstrates a solid financial foundation.
- Market Volatility: D-Wave's stock experienced a 19% drop in January, highlighting potential volatility; investors should be cautious of possible valuation adjustments if sales growth of the quantum annealing system falters or if progress on the gate-model system is insufficient, making it suitable only for risk-tolerant investors.
See More
D-Wave Quantum Shares Plummeted 18.9% in January
- Transformational Acquisition: D-Wave acquired Quantum Circuits Inc. for $550 million, combining its quantum annealing systems with full-stack superconducting gate-model quantum computing systems to enhance competitive positioning and scalability in the quantum computing market.
- Revenue Growth: Despite generating only $22 million in revenue over the first nine months of 2025, D-Wave's revenue tripled compared to the previous year, indicating potential market demand, although it faces pressure from a valuation exceeding $7 billion.
- Market Volatility: D-Wave's stock dropped 19% in January, reflecting investor concerns over the growth of its quantum annealing system sales and the progress of its gate-model system development, which may lead to further price fluctuations in the future.
- Investment Risk Advisory: Given that D-Wave was not included in The Motley Fool Stock Advisor's list of top investment picks, investors should exercise caution when considering purchasing its stock, especially in the high-risk environment of quantum computing.
See More
Analysis of Potential Stocks in Quantum Computing
- IonQ's Market Leadership: IonQ (IONQ) has seen a 14.98% increase, with a current price of $4.56 and a market cap of $12 billion, leveraging its unique trapped ion qubit technology to significantly reduce error rates, which, despite slower processing speeds, positions it well for launching a commercially viable product and enhancing its competitive edge.
- D-Wave's Unique Strategy: D-Wave Quantum (QBTS) has risen by 20.19%, with a current price of $3.48 and a market cap of $7.7 billion, focusing on quantum annealing technology to address optimization problems, which may carve out a niche market opportunity despite competition from general-purpose quantum computers.
- High-Risk, High-Reward Investment Landscape: While both IonQ and D-Wave have the potential for substantial returns, the intense competition in the quantum computing sector poses risks of bankruptcy or acquisition for many firms, necessitating careful risk-reward assessments by investors.
- Alternative Quantum Computing ETF: For investors wary of individual stock risks, considering a quantum computing ETF could provide broad exposure to nearly all publicly traded companies in the sector, offering potentially significant returns as useful quantum computing systems are developed, albeit likely lower than direct investments in IonQ or D-Wave.
See More
D-Wave Quantum Acquires QCI to Advance Quantum Computing
- Acquisition Strategy: D-Wave Quantum's acquisition of Quantum Circuits Inc. for $550 million, comprising $300 million in stock and $250 million in cash, aims to bolster its competitive edge in quantum computing, despite generating only $22 million in revenue over the first nine months of 2025, indicating a high-risk investment profile.
- Market Reaction: Although the acquisition is viewed as a transformative opportunity, D-Wave's stock fell 18.9% in January, reflecting market concerns about its future growth potential, prompting investors to carefully assess its valuation exceeding $7 billion.
- Technology Integration: This acquisition combines D-Wave's leading quantum annealing system with QCI's full-stack superconducting gate-model quantum computing systems, aiming for commercial scalability and advancing general-purpose fault-tolerant computing, thereby enhancing decision-making efficiency and operational optimization.
- Investment Risks: While D-Wave holds potential in quantum computing, its future success is uncertain, and investors should be aware of the potential for stock price volatility due to slow sales growth or insufficient technological advancements, suggesting that only risk-tolerant investors should consider holding this stock.
See More
Quantum Computing Industry Holds Massive Potential
- Market Potential Forecast: According to McKinsey, by 2035, the quantum computing market could generate annual revenues between $28 billion and $72 billion, with a 90% market share potentially leading to $45 billion in revenue for a leading company, highlighting significant market opportunities.
- Divergent Technology Paths: IonQ employs a trapped ion approach using lasers to cool atoms for quantum computing, while D-Wave utilizes quantum annealing focused on optimizing complex problem solutions, with both technologies offering unique advantages that could shape future market dynamics.
- Investment Return Potential: If either D-Wave or IonQ achieves $45 billion in annual revenue, their market caps could soar to $400 billion, translating to a potential gain of 5,233% for D-Wave and 2,885% for IonQ, indicating the high returns possible from investing in these companies.
- Risks and Opportunities: Despite the optimistic outlook for quantum computing, the path to success is fraught with challenges, and investors should carefully manage their positions; even a 1% initial investment could yield over 2,000% returns in the future, becoming a significant driver of portfolio gains.
See More
Investment Potential and Risks in Quantum Computing
- Massive Market Potential: McKinsey projects that by 2035, the quantum computing market could generate annual revenues between $28 billion and $72 billion, and if either IonQ or D-Wave captures a 90% market share, it could lead to $45 billion in annual revenue, highlighting significant investment upside.
- Diverse Technological Approaches: IonQ employs a trapped ion method that uses lasers to cool atoms for quantum computing, while D-Wave focuses on quantum annealing to solve optimization and sampling problems, indicating that the future market competition will hinge on the maturity of these technologies.
- Significant Investment Risks: Although both companies could potentially deliver over 1,000% returns, the nascent stage of quantum computing and intense competition necessitate caution, with a recommendation for investors to limit initial positions to 1% of their portfolios to mitigate risks.
- Intense Market Competition: The success of IonQ and D-Wave in the quantum computing sector is not guaranteed, as other competitors exist, prompting investors to stay informed about industry developments to adjust their investment strategies accordingly.
See More
D-Wave Quantum's Acquisition of QCI to Propel Development
- Quantum Computing Potential: Quantum computing holds transformative potential across industries such as pharmaceuticals, materials science, finance, and cybersecurity, with expectations for breakthroughs in production and deployment by 2025, addressing problems classical computers cannot solve.
- Acquisition of QCI: D-Wave's acquisition of Quantum Circuits Inc. for $550 million, comprising $300 million in stock and $250 million in cash, strategically positions the company to balance its commercial annealing quantum systems with the development of scalable gate-model quantum computers for general-purpose, fault-tolerant computing.
- Financial Health: Despite generating only $22 million in revenue over the first nine months of 2025, D-Wave's revenue has more than tripled year-over-year, and with a cash balance of $836.2 million as of September 30, 2025, the company demonstrates a solid financial foundation.
- Market Volatility: D-Wave's stock experienced a 19% drop in January, highlighting potential volatility; investors should be cautious of possible valuation adjustments if sales growth of the quantum annealing system falters or if progress on the gate-model system is insufficient, making it suitable only for risk-tolerant investors.
See More
D-Wave Quantum Shares Plummeted 18.9% in January
- Transformational Acquisition: D-Wave acquired Quantum Circuits Inc. for $550 million, combining its quantum annealing systems with full-stack superconducting gate-model quantum computing systems to enhance competitive positioning and scalability in the quantum computing market.
- Revenue Growth: Despite generating only $22 million in revenue over the first nine months of 2025, D-Wave's revenue tripled compared to the previous year, indicating potential market demand, although it faces pressure from a valuation exceeding $7 billion.
- Market Volatility: D-Wave's stock dropped 19% in January, reflecting investor concerns over the growth of its quantum annealing system sales and the progress of its gate-model system development, which may lead to further price fluctuations in the future.
- Investment Risk Advisory: Given that D-Wave was not included in The Motley Fool Stock Advisor's list of top investment picks, investors should exercise caution when considering purchasing its stock, especially in the high-risk environment of quantum computing.
See More
Analysis of Potential Stocks in Quantum Computing
- IonQ's Market Leadership: IonQ (IONQ) has seen a 14.98% increase, with a current price of $4.56 and a market cap of $12 billion, leveraging its unique trapped ion qubit technology to significantly reduce error rates, which, despite slower processing speeds, positions it well for launching a commercially viable product and enhancing its competitive edge.
- D-Wave's Unique Strategy: D-Wave Quantum (QBTS) has risen by 20.19%, with a current price of $3.48 and a market cap of $7.7 billion, focusing on quantum annealing technology to address optimization problems, which may carve out a niche market opportunity despite competition from general-purpose quantum computers.
- High-Risk, High-Reward Investment Landscape: While both IonQ and D-Wave have the potential for substantial returns, the intense competition in the quantum computing sector poses risks of bankruptcy or acquisition for many firms, necessitating careful risk-reward assessments by investors.
- Alternative Quantum Computing ETF: For investors wary of individual stock risks, considering a quantum computing ETF could provide broad exposure to nearly all publicly traded companies in the sector, offering potentially significant returns as useful quantum computing systems are developed, albeit likely lower than direct investments in IonQ or D-Wave.
See More
