D-Wave (NYSE:QBTS) stock is attracting attention as quantum computing gains traction for its potential to revolutionize processing power and tackle problems beyond the reach of classical computers. While gate-based quantum systems remain mostly experimental, D-Wave’s specialty – quantum annealing – has already been applied to real-world commercial challenges for years.
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That real-world applicability is a key reason why Canaccord analyst Kingsley Crane sees D-Wave as uniquely positioned in the quantum space.
“D-Wave is not only the clear market leader in quantum annealing but has lead innovation in the space since its inception,” the analyst opined.
Backing that conviction, Crane outlines three main reasons he considers D-Wave a “compelling investment.”
First, although the broader quantum field is buzzing with long-term potential, Crane points out that gate-based quantum models – often seen as the endgame – still face a murky path to commercialization. Estimates on readiness vary widely, from a few years to well over a decade. In contrast, D-Wave is already delivering value through its quantum annealing systems, with many clients using hybrid solutions today.
“In the meantime,” says Crane, “D-Wave is solving problems for customers (in many cases using a hybrid approach) and is getting paid to do so. All the while, D-Wave is also actively researching and developing in the gate model space which embeds a gate model ‘call option’ into the stock.”
Second, D-Wave’s diversified business model adds another layer of appeal. Its Leap platform – a quantum computing-as-a-service (QCaaS) offering – is the core driver of recurring revenue, providing enterprises with real-time quantum access. At the same time, D-Wave has started to gain traction selling physical systems, notably racking up $18 million in bookings in Q4 of 2024.
“As the recurring QCaaS revenue base continues to ramp, system sales present a powerful auxiliary revenue stream,” Crane noted, while also acknowledging the potential volatility it introduces.
The third pillar of Crane’s thesis centers on leadership. D-Wave is led by a highly experienced core team with deep technical knowledge and a strong track record of innovation. In Crane’s history of analyzing transformative software companies, those with category-defining leadership often represent “generational investment opportunities.” D-Wave is a “special case,” where it is not only the pioneer of quantum annealing, but has also maintained its leadership in R&D within this niche for decades. CEO Alan Baratz, who joined in 2017, and Chief Development Officer Trevor Lanting, who has been with the company since 2008, bring extensive scientific and technological expertise to the table. With revenue beginning to accelerate, Crane believes this team will “continue to build on its advantage as revenue now begins to inflect.”
Of course, with investor excitement running high, valuations have followed suit. QBTS shares have skyrocketed 1,732% over the past year, and at over 100 times projected 2026 sales, the stock now falls squarely into “long-term concept” territory.
Even so, Crane initiated coverage on QBTS with a Buy rating and a $20 price target – a 6% above Friday’s closing price – while suggesting a bull case scenario could push shares as high as $45. (To watch Crane’s track record, click here)
Overall, while D-Wave commands a Strong Buy consensus rating based on 8 unanimous Buy recommendations, the average price target of $18 sits ~5% below current levels. (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.