‘Strong Buy' D-Wave Quantum Stock Could Fall 34% From Here
Amid this year's market turbulence, quantum computing has remained a red-hot investing theme, and D-Wave Quantum (QBTS) is certainly riding the wave. With its cutting-edge tech gaining traction across real-world applications, the stock has skyrocketed an eye-popping 1,366% over the past year, fueled by surging sales and growing investor enthusiasm.
In fact, the spotlight grew even brighter on May 20, when shares surged nearly 26% after D-Wave announced the 'general availability' of its new Advantage2 quantum computer. This sixth-generation 'annealing quantum computer' is, according to D-Wave, 'production-ready' and delivers 'significant performance gains' over its predecessor.
Equipped with D-Wave's most advanced quantum processor to date and 4,400-plus superconducting qubits, the Advantage2 is designed to tackle 'computationally complex problems beyond the reach of classical computers,' including even the most powerful supercomputers. But despite the prevailing buzz around QBTS, analysts are striking a cautious tone. Even though stock holds a consensus 'Strong Buy' rating, the average price target points to more than 34% potential downside from current levels.
About D-Wave Quantum Stock
D-Wave Quantum (QBTS) is the first quantum computing company to bring commercial systems to market and is the only player developing both annealing and gate-model technologies. D-Wave has become a go-to for organizations tackling complex challenges in areas like optimization, artificial intelligence (AI), and research.
Its cloud-based and on-premise solutions support high availability, with more than 100 customers already putting the tech to work in real-world scenarios. With a market cap hovering around $4.5 billion, D-Wave has staged an incredible rally over the past year, and 2025 is proving no different. The stock has already surged 114% year-to-date, leaving the broader S&P 500 Index ($SPX) in the dust.
D-Wave's momentum also stands in stark contrast to its peers in the quantum computing space. While Rigetti (RGTI) has plunged 18% and IonQ (IONQ) has tanked 4% so far this year, D-Wave has pulled far ahead, cementing its status as the standout performer in the sector.
A Closer Look at D-Wave's Q1 Performance
D-Wave's latest financial performance has been just as eye-catching as its stock surge, and a key driver behind the rally. On May 8, the company delivered a blowout first-quarter earnings report that sent shares soaring 51.2% in a single day. Revenue came in at a record $15 million, representing a jaw-dropping 509% year-over-year increase and beating analyst expectations by roughly 42.9%.
The company credited the surge to the sale of a quantum computing system during the quarter, a milestone that not only boosted the top line but also underscored growing commercial demand for its technology. D-Wave's GAAP gross profit for Q1 jumped an astounding 736% year over year to $13.9 million, driven largely by a high-margin system sale that fueled the surge.
On the bottom line, D-Wave narrowed its quarterly loss to just $0.02 per share, an encouraging improvement from the $0.09 loss a year ago and ahead of Wall Street's expected $0.05 loss. On top of that, the company closed the quarter with a record $304.3 million in cash on hand as of March 31, 2025. Management expressed confidence that this war chest is more than sufficient to support operations all the way to profitability.
CEO Dr. Alan Baratz called the first quarter of 2025 'arguably the most significant in D-Wave's history,' highlighting major strides in bringing real-world quantum value to customers and researchers alike.
During the quarter, D-Wave recognized revenue from its first Advantage system sale to a major research institution, advanced another customer application into commercial production, and became the first to demonstrate quantum supremacy on a practical problem. These breakthroughs helped drive a record-setting quarter for both revenue and gross profit.
What Do Analysts Expect for D-Wave Stock?
Wall Street is buzzing with bullish sentiment for QBTS stock, sticking to a consensus 'Strong Buy' rating overall. Of the six analysts offering recommendations, five give it a solid 'Strong Buy,' and the remaining one gives it a 'Moderate Buy.' Yet, the average analyst price target of $12.33 points to more than 34% downside from current levels, revealing a layer of caution beneath the bullish surface. This gap highlights that the stock's rapid ascent could face a near-term pullback or volatility.
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