D-Wave Stock Rallies: Here’s What Analysts Predict Next

D-Wave Quantum (NYSE:QBTS) shares ripped higher in Tuesday’s session, gaining 30% over the day’s trading. Outsized returns have become a regular feature of this high-flying quantum computing name. Year-to-date, the stock has doubled in value but zooming out, the performance gets even more impressive: QBTS shares are up by a huge 1,208% over the past year.

Fueling the latest leg of the rally is the company’s announcement of the broad release of its Advantage2 quantum computing system – its most advanced model yet, specifically engineered to tackle problems that traditional computers cannot solve.

Powered by D-Wave’s most advanced quantum processor yet, the Advantage2 system is a commercial-grade solution built to tackle real-world challenges in areas like optimization, materials simulation, and AI. Customers across more than 40 countries can access the system through D-Wave’s Leap real-time quantum cloud service, which offers 99.9% uptime, sub-second response times, and SOC 2 Type 2 compliance to support enterprise-level performance and security. For hyperscalers and supercomputing centers looking to bring quantum computing into their own infrastructure, Advantage2 is also available for on-premises deployment.

Since June 2022, customers have run over 20.6 million problems on Advantage2 prototypes through the Leap cloud service, with usage increasing by 134% over the last six months. Organizations like Japan Tobacco have used an Advantage2 prototype in a proof-of-concept project combining quantum computing and AI for drug discovery. Additionally, research institutions such as the Jülich Supercomputing Center and Los Alamos National Laboratory have also leveraged the prototypes to support their advanced research efforts.

On Wall Street, D-Wave has some prominent supporters, amongst them Craig-Hallum’s Richard Shannon, an analyst who ranks in the top 2% of Street stock experts.

“We continue to believe that quantum computing will be a revolutionary technology, and QBTS’ nearly sole position supporting the annealing approach that is starting to take hold, as shown by two system sales to date and an expanding customer list, are compelling dynamics,” the 5-star analyst recently said. “As QBTS executes on its advantageous position in annealing, we think this stock can continue to work.”

He’s not alone. Roth Capital analyst Sujeeva De Silva – another 5-star analyst whose correct calls have given him a spot amongst the Street’s top 2% – shares a bullish outlook on D-Wave’s trajectory, pointing to the company’s strong positioning in a market that could redefine the future of computing.

“We believe QBTS’s Advantage hardware sales represents an incremental revenue upside opportunity, with contribution of $12.6m in the current quarter from inaugural sales to its lead hardware customer,” De Silva recently wrote. “We are encouraged by the company’s increasing visibility across QCaaS customers and expect improving traction as commercial customers invest in quantum computing applications.”

However, the Street’s view on QBTS presents a strange conundrum. On one hand, the stock carries a Strong Buy consensus rating, based on a unanimous 6 Buys. On the other, the average price target of $12.83 implies the shares will trade at a ~25% discount a year from now. It will be interesting to find out whether analysts soon upgrade their targets or downgrade their ratings. (See QBTS stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.