‘Now's the Time to Exit,' Says Top Investor About D-Wave Stock

Business Insider

5 days ago

It has been a month to remember for D-Wave Quantum (NYSE:QBTS), whose share price has shot up by some 154% since the beginning of May.
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The surging share price was powered by a positive Q1 2025 earnings report, during which the company reported revenues that increased by over 500% both sequentially and year-over-year. The company's $15 million in revenues outshot expectations by $4.5 million, while EPS of -$0.02 also surpassed projections by $0.03.
A further boost came last week, when D-Wave announced that its Advantage2, the company's sixth-generation quantum computer, has become available for purchase. Does this mean that the company is on the verge of rapid commercialization?
Not everyone's buying the hype. One highly ranked investor, known as Tech Stock Pros, remains cautious, arguing that the Q1 surge was exceptional and unlikely to be repeated in the near term.
'The revenue growth this quarter is on a one-time sale rather than commercial/enterprise adoption,' explains TSP, who is among the top 3% of TipRanks' stock pros.
The investor points out that bookings in Q1 were actually down 64% compared to last year, casting doubt on whether the blowout quarter is a sign of things to come or just a quantum blip.
'This is far from mainstream and not yet seeing enterprise adoption, which is what would support sustainable revenue growth,' argues TSP, adding that the decline in bookings is a 'big fat red flag.'
The investor does believe that the future is bright for QBTS, noting that the company's Quantum Computing-as-a-Service has already attracted over 100 customers, the majority of whom are from the private sector. Still, the field is still in its theoretical stages, meaning that the near-term prognosis is not so rosy.
With QBTS' valuation of 161x its sales now towering over the sector median of 3x, it is pretty clear to TSP that the recent 'joyride is over' and the time has come to exit. Against this backdrop, the investor rates QBTS shares a Strong Sell. (To watch Tech Stock Pros' track record, click here)
Meanwhile, Wall Street's stance appears conflicted. While QBTS holds a Strong Buy consensus rating based on 6 Buy recommendations, the average 12-month price target of $13 implies a ~26% downside from current levels. This disconnect suggests that analysts may soon need to revisit either their bullish ratings or the price targets they've issued. (See QBTS stock forecast)
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