Benchmark Predicts 29% Upside for D-Wave Quantum Following Major South Korea Partnership

The quantum computing industry is turning doubters into believers, one step at a time. And after D-Wave Quantum (QBTS) turned heads in its impressive Q1 earnings last month, it got a new Street high as Benchmark five-star analyst David Williams has reiterated a Buy rating on D-Wave Quantum, raising the price target from $14.00 to $20.00. That implies a 29% upside from the current share price of $15.55.

Williams’ Reasoning

The rating is based on D-Wave’s recent momentum in hardware sales and its growing international footprint. A new agreement with Yonsei University and Incheon Metropolitan City in South Korea is seen as a key step. The deal could lead to the installation of D-Wave’s Advantage2 system in the country, supporting South Korea’s broader push into quantum technology. Benchmark believes this move could open up new revenue streams and boost the company’s global visibility.

D-Wave also recently sold a quantum system to Germany’s Forschungszentrum Jülich, the first major high-performance computing center to buy one. Williams views this as a signal that demand is growing for D-Wave’s annealing-based quantum hardware.

Broad Financial Outlook

Financially, D-Wave reported $23 million in bookings for fiscal 2024, representing a 120% year-over-year increase. It also closed the year with $178 million in cash, helping extend its runway and support long-term growth through its quantum computing-as-a-service (QCaaS) model.

_{A recent jump in cash and working capital backs Benchmark’s view that D-Wave has the resources to support long-term growth. Source: Main Street Data}

Despite the bullish view, not all signs are positive. Insider sentiment has shifted to a negative tone, with increased selling activity from insiders in recent months. Still, Williams believes the company’s strategic partnerships, rising sales, and expanding international presence justify the $20.00 target.

Is QBTS Stock a Buy?

Based on the six ratings issued, D-Wave Quantum is considered a Strong Buy. The average QBTS stock price target is $14.20, implying an 8.68% downside.