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Quantum computing isn’t just a step forward. It’s a giant leap into the future. Unlike traditional computers bound by binary logic, quantum machines tap into the bizarre world of quantum mechanics, solving problems at speeds once thought impossible. From revolutionizing drug discovery to supercharging financial modeling, this technology has the potential to reshape entire industries.
While artificial intelligence (AI) has dominated the hearts and portfolios of investors over the past year, quantum computing made a grand entrance with the debut of Willow, Alphabet’s (GOOGL) groundbreaking quantum chip. This late-2024 development sparked fresh enthusiasm for the sector, with Wall Street buzzing about its long-term potential. In fact, as technology moves from theory to real-world applications, according to Boston Consulting Group, quantum computing will create an eye-popping $450 billion to $850 billion of economic value globally by 2040.
One company making serious waves in this space is D-Wave Quantum (QBTS). As the first commercial supplier of quantum computers and the only company developing both annealing and gate-model quantum computers, D-Wave holds a one-of-a-kind position in this booming market. What is even more impressive is that while most AI chipmakers and quantum players are still in the experimental phase, D-Wave has already scaled its technology, boasting the world’s largest quantum computer with over 5,000 qubits.
And now, with the launch of its Leap Quantum LaunchPad program, the company is pushing real-world quantum applications forward faster than ever. With all this momentum, is now the time to buy, sell, or hold this high-potential quantum computing stock?
About D-Wave Quantum Stock
Palo Alto-based D-Wave Quantum (QBTS) is a trailblazer in quantum computing, earning the title of the world’s first commercial supplier of quantum computers. Driven by a mission to unlock quantum’s transformative potential, D-Wave is making waves across industries, offering practical quantum applications that tackle some of the most complex challenges. Whether it's enhancing logistics, advancing AI, accelerating drug discovery, or revolutionizing financial modeling, D-Wave is bringing quantum technology into the real world.
With a market cap of around $1.5 billion, shares of this quantum computing stock have soared an incredible 600% over the past 52 weeks, leaving the broader S&P 500 Index’s ($SPX) 23.3% gains far behind. In just the past three months, the stock has posted astounding returns of 399.1%, obliterating the broader market’s 4.4% growth during the same stretch.
Considering the stock’s jaw-dropping rally over the past months, QBTS is trading at a sky-high 103.70 times sales, far surpassing its sector median. This astronomical valuation speaks volumes about how the market appears to be betting big on the company’s quantum computing breakthroughs, signaling expectations of substantial growth.
A Closer Look at D-Wave Quantum’s Financials
D-Wave Quantum’s Q3 earnings report, released on Nov. 14, fell short of Wall Street's expectations on both the top and bottom lines. The company posted $1.9 million in revenue, marking a 27% year-over-year decline, primarily due to a drop in professional service revenue. On a positive note, its Quantum Computing as a Service (QCaaS) revenue grew by 41% year-over-year, signaling growth in its core business.
The company reported a GAAP loss per share of $0.11, a slight improvement from last year’s $0.12 loss but still wider than analysts' expected $0.10 loss per share. In a move to strengthen its financial position, D-Wave Quantum recently secured $150 million in gross proceeds through an at-the-market equity offering. With a cash balance of approximately $320 million, the company is poised for growth.
These funds are strategically allocated to support working capital and capital expenditures, fueling D-Wave’s technical development and expanding its business operations as it continues to push the boundaries of quantum computing. Furthermore, it is also worth highlighting the company’s announcement on Jan. 10. The company revealed that its fiscal 2024 bookings are set to exceed $23 million, a massive 120% year-over-year increase.
Even more impressive, Q4 bookings are expected to be at least $18 million, showcasing a stunning 500% growth compared to fiscal 2023 Q4 bookings of just $3 million. Adding to the excitement, D-Wave also announced the first-ever customer purchase of its D-Wave Advantage annealing quantum computing system, marking a major expansion of its revenue model and further solidifying its position as a quantum leader.
D-Wave Unveils Leap Quantum LaunchPad Program
On Jan. 22, D-Wave unveiled its exciting new Leap Quantum LaunchPad program. This initiative is set to fast-track the deployment of quantum computing applications, providing businesses with free trial access to D-Wave’s advanced annealing quantum technology. The goal is to help customers harness the power of quantum computing to solve complex business and scientific problems that traditional computers struggle to tackle.
The Leap Quantum LaunchPad program is designed to help businesses fast-track their move to production-ready quantum applications. By offering three months of free access to D-Wave’s powerful technology and expert support, the program enables companies to quickly explore, develop, and implement quantum and hybrid-quantum solutions that can drive real-time results. This marks a major step forward in accelerating the widespread adoption of quantum computing across industries.
What Do Analysts Expect for D-Wave Quantum Stock?
Despite limited coverage, Wall Street remains largely bullish on QBTS stock, maintaining a consensus rating of “Strong Buy.” Of the seven analysts offering recommendations, six advise a “Strong Buy,” and the remaining one analyst maintains a “Moderate Buy.” The average analyst price target of $6.71 indicates 8% potential upside, while the Street-high price target of $9 suggests that QBTS could rally as much as 44% from here.
D-Wave Quantum is certainly making impressive strides in the quantum computing space, with strong stock performance and the launch of its Leap Quantum LaunchPad program, designed to accelerate the adoption of quantum applications. Although its latest quarterly financials have shown some volatility, the company’s significant growth in bookings anticipated for fiscal 2024 and a healthy cash position signal potential. To that end, for investors looking to capitalize on the future of technology, D-Wave could be an ideal investment candidate now.
