D-Wave Quantum Shares Surge 12.5% After Price Target Upgrade
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: seekingalpha
- Analyst Day Highlights: Mizuho Securities raised D-Wave Quantum's price target from $29 to $35 after its first analyst day, reiterating an Outperform rating, which reflects strong market confidence in its leadership in quantum computing.
- Quantum Roadmap: D-Wave aims to achieve 10 logical qubits by 2030 and potentially 100 by 2032, indicating significant long-term growth potential in the quantum computing sector that is likely to attract further investment.
- Market Opportunity: The total addressable market is projected to be between $450 billion and $850 billion by 2040, with a target gross margin of 65% to 75% for quantum computing-as-a-service (QCaaS), showcasing robust profitability prospects.
- Sales Growth Potential: D-Wave expects annual revenue of $25 million to $30 million per system, with four systems currently running in the cloud, indicating strong potential for sales growth and margin enhancement in the future.
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Analyst Views on QBTS
Wall Street analysts forecast QBTS stock price to rise
13 Analyst Rating
13 Buy
0 Hold
0 Sell
Strong Buy
Current: 23.370
Low
35.00
Averages
40.67
High
48.00
Current: 23.370
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.
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- Analyst Rating Impact: Mizuho analyst Vijay Rakesh raised D-Wave Quantum's price target to $35 per share, praising its plan to build a gate-based quantum computer with 10 logical qubits by 2030, while predicting a market size of $450 billion to $850 billion by 2040, further solidifying D-Wave's leadership in the quantum computing market.
- Market Challenges for Rigetti: Despite Rigetti's faster-than-expected sales growth, Rakesh lowered its price target to $27 per share a month ago, indicating concerns over its valuation and highlighting the significant challenges Rigetti faces in the competitive quantum computing landscape.
- Cautious Investor Sentiment: While the quantum computing industry holds vast potential, analysts generally expect neither Rigetti nor D-Wave to turn a profit in the next five years, urging investors to carefully assess their risk tolerance and be prepared for a long-term investment horizon.
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- IonQ's Uncertain Outlook: While Rakesh expressed optimism for D-Wave, he did not mention IonQ, which he downgraded to a $61 price target two months ago, reflecting a lack of confidence in IonQ's prospects.
- Investment Risk Advisory: Analysts caution that both IonQ and D-Wave are unlikely to turn a profit in the next five years, urging investors to carefully assess their risk tolerance and be prepared for a long wait.
See More
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- Analyst Day Highlights: Mizuho Securities raised D-Wave Quantum's price target from $29 to $35 after its first analyst day, reiterating an Outperform rating, which reflects strong market confidence in its leadership in quantum computing.
- Quantum Roadmap: D-Wave aims to achieve 10 logical qubits by 2030 and potentially 100 by 2032, indicating significant long-term growth potential in the quantum computing sector that is likely to attract further investment.
- Market Opportunity: The total addressable market is projected to be between $450 billion and $850 billion by 2040, with a target gross margin of 65% to 75% for quantum computing-as-a-service (QCaaS), showcasing robust profitability prospects.
- Sales Growth Potential: D-Wave expects annual revenue of $25 million to $30 million per system, with four systems currently running in the cloud, indicating strong potential for sales growth and margin enhancement in the future.
See More
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- Market Sentiment Sensitivity: With price-to-sales ratios soaring as high as 645, these quantum computing stocks are extremely sensitive to market sentiment shifts, necessitating caution from investors, particularly during downturns in market mood.
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See More
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See More
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- Stock Surge: Rigetti Computing's stock rose 8.2% by 11 a.m. ET on Monday, marking its third consecutive day of gains, reflecting sustained market interest and increased investor confidence in the quantum computing sector.
- Analyst Rating Impact: Mizuho analyst Vijay Rakesh raised D-Wave Quantum's price target to $35 per share, praising its plan to build a gate-based quantum computer with 10 logical qubits by 2030, while predicting a market size of $450 billion to $850 billion by 2040, further solidifying D-Wave's leadership in the quantum computing market.
- Market Challenges for Rigetti: Despite Rigetti's faster-than-expected sales growth, Rakesh lowered its price target to $27 per share a month ago, indicating concerns over its valuation and highlighting the significant challenges Rigetti faces in the competitive quantum computing landscape.
- Cautious Investor Sentiment: While the quantum computing industry holds vast potential, analysts generally expect neither Rigetti nor D-Wave to turn a profit in the next five years, urging investors to carefully assess their risk tolerance and be prepared for a long-term investment horizon.
See More
IonQ Stock Rises Thanks to D-Wave Analyst Upgrade
- Stock Surge: IonQ's stock jumped 7.3% to $4.99 by 11:45 a.m. ET on Monday, largely influenced by the rise in D-Wave Quantum's stock, indicating heightened market interest in quantum computing.
- Analyst Upgrade: Mizuho analyst Vijay Rakesh raised D-Wave's price target by 20% to $35 per share, praising its plan to build a quantum computer with 10 logical qubits by 2030, predicting a market size of $450 billion to $850 billion by 2040.
- IonQ's Uncertain Outlook: While Rakesh expressed optimism for D-Wave, he did not mention IonQ, which he downgraded to a $61 price target two months ago, reflecting a lack of confidence in IonQ's prospects.
- Investment Risk Advisory: Analysts caution that both IonQ and D-Wave are unlikely to turn a profit in the next five years, urging investors to carefully assess their risk tolerance and be prepared for a long wait.
See More
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- Analyst Day Highlights: Mizuho Securities raised D-Wave Quantum's price target from $29 to $35 after its first analyst day, reiterating an Outperform rating, which reflects strong market confidence in its leadership in quantum computing.
- Quantum Roadmap: D-Wave aims to achieve 10 logical qubits by 2030 and potentially 100 by 2032, indicating significant long-term growth potential in the quantum computing sector that is likely to attract further investment.
- Market Opportunity: The total addressable market is projected to be between $450 billion and $850 billion by 2040, with a target gross margin of 65% to 75% for quantum computing-as-a-service (QCaaS), showcasing robust profitability prospects.
- Sales Growth Potential: D-Wave expects annual revenue of $25 million to $30 million per system, with four systems currently running in the cloud, indicating strong potential for sales growth and margin enhancement in the future.
See More
Quantum Computing Stocks Heat Up Again
- Market Recovery: Shares of IonQ, Rigetti Computing, and D-Wave Quantum have surged over 50% since the end of March, despite a recent pullback, indicating strong investor interest and renewed confidence in quantum computing.
- Government Investment: The U.S. Department of Commerce announced a $2 billion funding allocation to the quantum industry under the CHIPS and Science Act, with nine companies receiving direct funds in exchange for equity, highlighting the strategic importance of quantum technology, even though IonQ was not included.
- Technology Maturity: While quantum computing is seen as potentially revolutionary, many researchers believe that practical, fault-tolerant quantum computing may still be a decade or more away, suggesting that current market valuations could be overly optimistic.
- Speculative Risks: IonQ, D-Wave, and Rigetti have market caps of $21.2 billion, $8.7 billion, and $6.5 billion respectively, yet their limited revenue and profitability make these stocks highly sensitive to market sentiment, posing significant risks for investors amid potential market corrections.
See More
Quantum Computing Stocks Surge Over 50% Amid $2 Billion Federal Investment
- Federal Investment Catalyst: The U.S. Department of Commerce announced a $2 billion funding allocation to the quantum computing sector, directly investing in nine companies including D-Wave and Rigetti, which propelled quantum computing stocks to surge over 50%, despite IonQ not being among the recipients.
- Market Sentiment Sensitivity: With price-to-sales ratios soaring as high as 645, these quantum computing stocks are extremely sensitive to market sentiment shifts, necessitating caution from investors, particularly during downturns in market mood.
- Maturity Challenges: While the federal investment is seen as a validation of the strategic importance of quantum computing, many researchers believe that practical fault-tolerant quantum computing could still be a decade or more away, suggesting that current market valuations may be overly optimistic.
- Cautious Investment Advice: Analysts recommend avoiding purchases of pure-play quantum computing stocks at current price levels, particularly D-Wave Quantum, as these stocks' future returns hinge on optimistic outcomes that may not materialize.
See More
U.S. Government Invests in Quantum Computing Firms
- Government Investment Context: The U.S. government announced up to $100 million in equity investments in quantum computing firms, including D-Wave Quantum and Rigetti Computing, marking an unconventional investment strategy aimed at enhancing national security and reducing reliance on foreign competitors during economic pressures.
- Rigetti's Development Challenges: Rigetti is set to receive $100 million for R&D, yet its superconducting quantum computing technology, while fast, significantly lags in accuracy compared to other techniques, leading to delays in its new system release and exclusion from DARPA's Quantum Benchmarking Initiative.
- D-Wave's Technological Edge: D-Wave Quantum will also receive $100 million to focus on its 100,000-qubit annealing system and 10,000-qubit gate-model system, excelling in optimization problem-solving, but still needs to advance in traditional gate-based quantum computing.
- Diverse Investment Analysis: The investments span various quantum computing technologies, including superconducting, annealing, and neutral-atom methods, indicating a broad government bet on competing technologies rather than validation of individual stocks, suggesting that both D-Wave and Rigetti remain highly speculative investment choices.
See More
