Is D-Wave Quantum Stock a Buy?

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Investing in stocks like surfing the ocean waves is similar, where both can find a large wave and enjoy the ride for as long as it lasts. Currently, D-Wave Quantum (QBTS), with “wave” in its very name, seems to be experiencing just such a moment.

Riding on the surge of enthusiasm for quantum computing, D-Wave Quantum finds itself at the forefront. In 2025 alone, its shares have skyrocketed over twofold. However, should you invest in D-Wave Quantum stocks right now? That’s a question that needs careful consideration.

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The case for buying D-Wave Quantum

One persuasive reason to invest in D-Wave Quantum stocks lies in the fact that their technology is currently practical and effective. While many discuss the potential of quantum computing, D-Wave is actively contributing to making this potential a reality.

As an illustration, Ford Otosan, a collaboration between Ford Motor (F) and Koç Holding in Turkey, is employing D-Wave’s technology to optimize its production procedures. Notably, the company has managed to decrease the scheduling time for its Ford Transit vehicles by a factor of 6.

In addition to D-Wave Quantum, some other notable companies that utilize its quantum computing technology include Accenture, BASF, Lockheed Martin, Mastercard, and Pattison Food Group. These entities are among many others who have adopted this advanced technology.

D-Wave Systems’ remarkable expansion is evident without a word being spoken, as demonstrated by the astronomical 509% increase in revenue during the first quarter of 2025 when compared to the previous year. This upward trend may persist as demand for their latest Advantage systems increases and they uncover additional applications for their quantum computing technology.

Another compelling reason to consider purchasing the stock is the potential for growth in the quantum computer field. A well-regarded consultancy, McKinsey, forecasts that this market could expand to an impressive $198 billion by the year 2040.

It seems that D-Wave Quantum is financially stable, as their cash reserves amounted to approximately $304.3 billion by the close of Q1. The company’s leadership is confident that these funds will sustain their operations until D-Wave manages to turn a profit.

The case against buying D-Wave Quantum

While there isn’t much resistance to the idea of investing in D-Wave Quantum stock, one could certainly present a compelling argument against it. Let’s revisit some points that might make you think twice about buying the stock. Firstly, D-Wave continues to operate at a loss. Despite management’s belief that they have enough cash to sustain the company until profitability, there’s a possibility that D-Wave may need to secure additional funding through share issuances, which could dilute the value of existing shares.

In other words, since D-Wave Quantum isn’t making profits, traditional earnings-based methods for evaluating its value are not applicable. Instead, their high price-to-sales ratio of over 192 becomes the primary means of assessment. However, this significant multiple can only be considered reasonable if D-Wave maintains an extremely rapid growth trajectory.

It’s possible that D-Wave will continue to expand rapidly, but there’s also a chance it won’t. One factor contributing to this uncertainty is the intense competition it faces. Companies like IonQ, Quantum Computing Inc., and Rigetti Computing are among those marketing quantum computers. Furthermore, large tech companies such as Alphabet (Google’s parent company), Amazon, IBM, and Microsoft pose significant competitive threats in this field as well.

While quantum computing holds great potential, there’s no certainty that it will meet the high expectations set by the hype. The challenges in technology could turn out to be tougher than anticipated, which might delay the development of practical, large-scale quantum computers. This delay could potentially slow down the enthusiasm surrounding stocks related to quantum computing.

Final verdict

What’s the final verdict on whether to buy D-Wave Quantum stock? I think we have a hung jury.

For cautious investors, D-Wave might not be an ideal choice due to the numerous uncertainties surrounding its stock. Value investors may find this stock less appealing given its high price-to-sales ratio. Additionally, income investors should consider other opportunities as D-Wave does not currently offer a dividend and is unlikely to do so in the near future.

On the other hand, Aggressive growth investors may find it intriguing to invest modestly in D-Wave Quantum. While it’s true that this investment carries some risk and is indeed a speculative move, the potential for significant returns in the long run cannot be overlooked.

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2025-07-24 12:50