D-Wave Quantum (QBTS) is set to report its second-quarter results on August 7. Analysts expect a Q2 loss of $0.05 per share on revenue of $2.54 million. In a new report yesterday, Stifel Nicolaus Top analyst Ruben Roy initiated coverage on QBTS with a Buy rating and a $26 price target, implying more than 50% upside from current levels. The five-star analyst called D-Wave a first mover in commercial quantum computing, with strong potential to stand out in a fast-growing industry.
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Why Stifel Is Bullish on QBTS
Roy believes D-Wave is ahead of its rivals due to its early focus on quantum annealing, a type of quantum computing that’s already being used to solve real-world problems. He pointed out that the company has been working in this field since 1999 and now has a range of paying commercial customers.
He also pointed to a key deal earlier this year, when D-Wave sold a system to Germany’s Julich Supercomputing Centre. He sees this as clear evidence that interest in D-Wave’s technology is rising, especially from global research institutions.
On the financial side, Roy noted that D-Wave is raising enough equity to build a strong cash position. At the end of Q1, the company had about $320 million in cash, thanks to a $150 million equity raise completed earlier this year. He said these equity offerings give D-Wave enough funding to reach profitability, which he sees as a key positive for investors.
Looking ahead, Roy believes the total quantum computing market could grow to $10 billion by 2030, and D-Wave is well-positioned to gain from it.
Is QBTS Stock a Good Buy?
Turning to Wall Street, D-Wave Quantum stock has a Strong Buy consensus rating based on nine Buys assigned in the last three months. At $19.50, the average QBTS stock price target implies a 13.50% upside potential.
