D-Wave Quantum (NYSE:QBTS) is riding the wave of quantum computing enthusiasm, an industry built on the promise of unprecedented processing power, even if the road to commercial viability is still a work in progress. But Wall Street rarely waits for certainty. Investors have embraced the hype, and D-Wave stands out as a prime beneficiary, racking up gains of 90% in 2025 and an eye-popping 1,300% over the past year.
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While other players in the cohort have also been on strong runs, D-Wave’s approach differs from what most others are doing. Rather than relying on the “gate model” of quantum computing, which resembles the way traditional computers operate, they use a technique called quantum annealing. This method is thought to be better suited for tackling complex optimization challenges, like finding the most efficient delivery routes or enhancing manufacturing processes.
This, says top investor Michael Wiggins De Oliveira, is what the bull case rests on. The challenge here, though, is proving that D-Wave’s quantum computers can effectively solve practical problems. To this end, they’re partnering with companies like Ford to improve efficiency in car manufacturing. At the same time, D-Wave has introduced its newest Advantage2 system, offering significant improvements in speed and accuracy. Beyond manufacturing, the tech is gaining interest in fields like blockchain, where it has the potential to greatly reduce energy consumption and enhance machine learning capabilities.
“Essentially,” the 5-star investor goes on to add, “the point is that it’s very early in the story, but there are some tangible signs that point to growing demand.”
But the key here for De Oliveira might be that it is “very early in the story.” Moreover, sales growth over the near term will likely take a bit of a hit. Back in 4Q24, the company had forecasted a major sale for 1Q25. Now that this sale has passed, investors could be wondering what comes next. Currently, over 80% of D-Wave’s first-quarter revenue came from sales of its Advantage2 hardware. Unless the company secures another large deal soon, its impressive growth (over 500% year-over-year in Q1) is likely to slow dramatically, dropping to under 30% growth y/y.
That’s not to say the stock can’t climb further. Other past bubbles – clean energy, cannabis, meme stocks – have shown that it is possible. “With real tech, enterprise traction, and a shot at commercial quantum supremacy, it’s not hard to imagine its stock reaching unprecedented heights if momentum kicks in,” De Oliveira went on to say.
Still, the real question is whether that’s a risk worth taking. At today’s valuation, De Oliveira seems to think the answer is no.
“I’m impressed by D-Wave’s traction and potential, but I’m not ready to chase the stock at 130x forward sales,” the investor summed up.
Accordingly, De Oliveira rates QBTS shares a Hold (i.e., Neutral). (To watch De Oliveira’s track record, click here)
The Street’s analysts, however, unanimously disagree; based on Buys only – 6, in total – the stock claims a Strong Buy consensus rating. That said, the $14.20 average target factors in a one-year slide of 11%. It will be interesting to see whether analysts update their targets shortly. (See QBTS stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.