D-Wave Quantum
QBTS
$10.65
+1.62%
D-Wave Quantum Inc. develops and delivers quantum computing systems, cloud-accessible software, and professional services, positioning itself as the only commercial supplier building both annealing and gate-model quantum computers, with applications spanning logistics, artificial intelligence, materials science, drug discovery, and financial modeling. The company is a pure-play quantum hardware and platform vendor competing in the emerging quantum computing industry, differentiated by its commercially available annealing systems and its Leap cloud service rather than by scale or profitability. The current investor narrative is dominated by the tension between speculative enthusiasm and weak fundamentals: bookings reportedly surged over 1,000% and a roughly $100 million U.S. government award validated the sector, yet revenue actually declined year over year and the stock has collapsed through 2026 as investors reassess a valuation that had priced in years of future growth. Coverage debates now center on whether D-Wave's commercial traction and government backing can translate into revenue inflection before its cash burn forces further dilution, with sell-side analysts remaining overwhelmingly bullish even as the share price has fallen by more than 60% over the past year.…
QBTS
D-Wave Quantum
$10.65
Related headlines
Investment Opinion: Should I buy QBTS Today?
Rating: Hold (speculative, high-risk). The core thesis is that D-Wave's differentiated dual-architecture position, a reported 1,000%+ bookings surge, and a roughly $100 million U.S. government award give it genuine option value on a commercial quantum future, but with revenue of just $3.076 million in Q2 2026 (down -0.61% YoY) and a 341.62x trailing P/S, the current $10.68 price already discounts years of flawless execution. The 15-of-16 Buy consensus and $33.835 average target (+217% upside) anchor the bull case, but the reiterated-not-raised pattern and a $18.36-to-$43.00 target spread of more than 2.3x signal low conviction rather than a high-conviction call.
Supporting evidence is mixed but tilts toward patience over accumulation at this price. On the positive side, the balance sheet is a fortress with debt-to-equity of 0.051, a current ratio of 42.38, and $296.6 million in cash, funding roughly two to two-and-a-half years at the -$119.076 million trailing free cash flow burn. However, the operating picture is deteriorating: Q2 2026 gross margin fell to 55.4% from 64.8% in Q4 2025, operating income was -$53.278 million against ~$56.354 million in quarterly costs (roughly 18x revenue), and EBITDA of -$42.68 million is no better than Q1's -$42.40 million. The forward P/S of roughly 18.6x on the $452.5 million consensus revenue implies the market expects an ~18-fold revenue increase, while the stock sits at just 9.2% of its 52-week range after a -62.38% one-year decline.
Three risks could invalidate any bullish framing: bookings failing to convert into recognized revenue before another dilutive raise (following $527.7 million raised in Q2 2025 and $67.4 million in Q4 2025), continued multiple compression from the already-de-rated 341.62x P/S, and competitive displacement highlighted by a Motley Fool comparison favoring Rigetti's deeper government ties and a larger government award going to GlobalFoundries. This Hold would upgrade to Buy on evidence of a revenue inflection (e.g., quarterly revenue sustainably above $10 million or bookings converting at a visible rate) or a further de-rating toward a single-digit forward P/S, and would downgrade to Sell on a break below the $8.48 52-week low or a consensus revenue cut. Verdict: overvalued on any near-term fundamental basis, fairly valued only as a long-dated option on quantum commercialization.
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QBTS 12-Month Price Forecast
The near-term evidence favors the bear case: revenue is flat to down, gross margin has compressed from 64.8% to 55.4%, and the 341.62x trailing P/S prices in an ~18-fold revenue increase that is nowhere visible in reported results. The bull case rests entirely on forward items — the bookings surge, the ~$100 million government award, and a $33.835 average target implying +217% upside — none of which has yet appeared in the income statement. With the stock at just 9.2% of its 52-week range after a -62.38% year and a beta of 2.334, downside momentum and dilution risk dominate the 12-month setup, even though the fortress balance sheet (debt-to-equity 0.051, current ratio 42.38) buys time. I would upgrade to neutral on a confirmed revenue inflection above $10 million per quarter or a forward P/S compressing into single digits, and downgrade further on a break below the $8.48 low or a consensus revenue cut.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on D-Wave Quantum's 12-month outlook, with a consensus price target around $30.59 and implied upside of +187.2% versus the current price.
Average Target
$30.59
16 analysts
Implied Upside
+187.2%
vs. current price
Analyst Count
16
covering this stock
Price Range
$18 - $43
Analyst target range
Coverage is robust for a company of this size, with 16 analysts publishing ratings: 15 Buy, 2 Hold, and 0 Sell, producing a consensus recommendation of "strong_buy" and a recommendation mean of 1.29 (where 1.0 is a strong buy). The average target price of $33.835 implies roughly +217% upside from the current $10.68, a gap that is unusually wide and signals that sell-side models are anchored to long-dated quantum computing scenarios rather than near-term fundamentals. The consensus is unambiguously bullish, but the divergence between a "strong buy" rating and a stock down 62% year-to-date suggests analysts have been slow to mark targets to market.
The full target range runs from a low of $18.36 (still +72% above the current price) to a high of $43.00 (+303%), a spread of more than 2.3x that indicates very low conviction and high dispersion of assumptions. The high target likely assumes successful conversion of the reported bookings surge, government contract ramp, and multiple expansion on a 2027-2028 revenue base, while even the low target embeds substantial growth from today's $3.1 million quarterly run rate. Institutional ratings show a pattern of reiterations rather than fresh upgrades: B. Riley Securities reiterated Buy on 2026-11-02, Rosenblatt reiterated Buy on 2026-08-07 and 2026-07-28, Mizuho reiterated Outperform on 2026-06-15, and Roth Capital, Needham, and Canaccord all reiterated Buy in May-June 2026, with no downgrades in the visible record. The absence of downgrades despite a 62% decline is notable and may reflect relationship dynamics or genuine long-horizon conviction, but investors should treat the wide target spread and reiterated-not-raised ratings as a signal of uncertainty rather than a high-conviction call.
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Bulls vs Bears: QBTS Investment Factors
The bear case currently carries stronger evidence: revenue is flat to down (-0.61% YoY), losses are widening on an operating basis (EBITDA -$42.68 million), and the stock trades at 341.62x trailing sales while sitting near the floor of its 52-week range after a -62% year. The bull case rests almost entirely on forward-looking items — a 1,000%+ bookings surge, a ~$100 million government award, and a $33.835 average analyst target implying +217% upside — none of which has yet appeared in reported revenue. The single most important tension is whether bookings convert into recognized revenue before the $296.6 million cash pile (roughly two to two-and-a-half years of runway at current burn) forces another dilutive raise. If bookings translate into a visible revenue inflection toward the $452.5 million consensus, the bull thesis is vindicated; if conversion stalls, the 341.62x P/S multiple has enormous room to compress further.
Bullish
- Analyst consensus overwhelmingly bullish: 15 of 16 analysts rate QBTS a Buy with zero Sells, producing a recommendation mean of 1.29 (strong buy). The average target of $33.835 implies +217% upside from $10.68, and even the lowest target of $18.36 sits +72% above the current price.
- Bookings surge signals latent demand: Reported bookings jumped over 1,000% year over year, and the AT&T partnership expansion demonstrates real-world quantum speedups. This forward-looking pipeline is the core reason sell-side models look through the current $3.076 million quarterly revenue base toward a $452.5 million consensus estimate.
- Fortress balance sheet, minimal debt: Debt-to-equity is just 0.051 and the current ratio is 42.38, backed by $296.6 million in cash at Q2 2026. At the trailing free cash flow burn of -$119.1 million, this funds roughly two to two-and-a-half years of operations without immediate financing pressure.
- Government validation of quantum sector: A roughly $100 million U.S. government award to D-Wave validates quantum computing as a strategic national priority and provides non-dilutive funding. It also supports the narrative that annealing systems have near-term commercial utility beyond lab research.
Bearish
- Revenue actually declining YoY: Q2 2026 revenue of $3.076 million fell -0.61% year over year, and the prior-year Q1 2025 spike to $15.001 million has never repeated. The reported bookings surge has not converted into recognized revenue, so the growth story remains entirely prospective.
- Extreme valuation versus any benchmark: Price-to-sales is 341.62x trailing and EV/sales is 280.04x, with a forward P/S still around 18.6x on the $452.5 million consensus estimate. The market is pricing roughly an 18-fold revenue increase, an expectation that requires flawless multi-year execution.
- Deep losses and heavy cash burn: Q2 2026 net loss was -$48.0 million with operating income of -$53.3 million, and trailing free cash flow is -$119.1 million. The cost base (~$56.4 million quarterly) is roughly 18 times revenue, and gross margin has compressed from 64.8% in Q4 2025 to 55.4%.
- Severe downtrend and dilution risk: The stock is down -62.38% over one year and -62.03% YTD, sitting just 9.2% of its 52-week range with a -79.79% max drawdown. With $296.6 million cash against a ~$119 million annual burn, further equity issuance and dilution are likely before self-funding.
QBTS Technical Analysis
QBTS is locked in a severe, sustained downtrend, with the 1-year price change at -62.38% and the year-to-date decline at -62.03%, a collapse that has erased roughly two-thirds of shareholder value. At $10.68, the stock sits at just 9.2% of its 52-week range of $8.48 to $32.39, meaning it is trading near the absolute floor of its annual range and only about 26% above its 52-week low. This positioning signals persistent distribution and a lack of buyer conviction rather than a value opportunity, and the maximum drawdown of -79.79% underscores how violent the reversal from the highs has been. The trend structure remains bearish: the current price is far below any plausible moving-average cluster, and every rally attempt has been sold.
Short-term momentum is uniformly negative and accelerating to the downside, with a 1-month change of -29.83%, a 3-month change of -48.55%, and a 6-month change of -52.68%. The 1-month decline is steeper than the 6-month decline, indicating that selling pressure has intensified rather than stabilized, and relative strength versus the S&P 500 is deeply negative across every window (-24.84% over 1 month, -43.64% over 3 months, -71.97% over 1 year) while SPY itself fell only 4.99% over the past month. The one counterpoint is the most recent session, in which the stock jumped 18.01% from a previous close of $9.05 to $10.68 on volume of roughly 26.5 million shares, a sharp oversold bounce off the $8.48 low area. Given the absence of RSI data, this single-day surge looks more like a technical snap-back or short-covering rally than a trend reversal, particularly with a short ratio of 4.86 days to cover providing fuel for squeezes.
Key technical levels are clearly defined: support rests at the 52-week low of $8.48, roughly 21% below the current $10.68, while resistance sits at the 52-week high of $32.39, more than 200% above the current price. A breakdown below $8.48 would confirm a fresh leg lower and likely trigger momentum-driven selling, whereas a sustained reclaim of even the $13-$15 area would be the first evidence of a bottoming process. Volatility is extreme, with a beta of 2.334 meaning the stock is roughly 133% more volatile than the market, so position sizing must account for daily swings that can exceed 15-18% as seen in the latest session. Combined with the -79.79% max drawdown, this is a high-risk instrument where stops and sizing discipline are paramount.
Beta
2.33
2.33x market volatility
Max Drawdown
-79.8%
Largest decline past year
52-Week Range
$8-$32
Price range past year
Annual Return
-63.3%
Cumulative gain past year
| Period | QBTS Return | S&P 500 |
|---|---|---|
| 1m | -22.5% | -2.4% |
| 3m | -49.0% | -2.3% |
| 6m | -47.7% | +2.8% |
| 1y | -63.3% | +11.3% |
| ytd | -62.1% | +11.4% |
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QBTS Fundamental Analysis
Revenue is stagnating at a very low absolute base, with Q2 2026 revenue of $3.076 million representing a -0.61% year-over-year decline versus the prior-year quarter, and the multi-quarter trend is choppy rather than compounding: $2.752 million in Q4 2025, $2.858 million in Q1 2026, and $3.076 million in Q2 2026, against a spike to $15.001 million in Q1 2025 that has not been repeated. Segment data shows professional services at $929,000, system sales at just $255,000, and other product and service revenue at $32,000, meaning the business is overwhelmingly services-led and hardware system sales remain immaterial. The reported bookings surge has not yet converted into recognized revenue, so the investment case rests on a future inflection rather than current top-line momentum, and the consensus revenue estimate of $452.5 million (range $329.8 million to $553.1 million) implies expectations of transformational growth that is nowhere visible in reported results.
QBTS is deeply unprofitable, with Q2 2026 net income of -$48.028 million and a net margin of -15.61%, while gross margin of 55.4% in the quarter has compressed from 63.6% in Q1 2026 and 64.8% in Q4 2025. Operating income was -$53.278 million with an operating margin of -17.32%, driven by research and development of $28.239 million and selling, general and administrative costs of $26.743 million, so the cost base is roughly 18 times quarterly revenue. The loss trajectory is not improving on an operating basis: EBITDA was -$42.68 million in Q2 2026 versus -$42.40 million in Q1 2026, and the trailing EPS of -$0.042 masks a quarterly diluted EPS of -$0.13. For a pre-revenue-scale hardware company these margins are not atypical, but the gap between a 55% gross margin and a -17% operating margin shows that scale, not unit economics, is the binding constraint.
The balance sheet is the company's strongest asset, with a debt-to-equity ratio of just 0.051 and a current ratio of 42.38 reflecting a cash position of $296.6 million at the end of Q2 2026, down from $635.3 million at year-end 2025. Cash burn is substantial: free cash flow was -$32.943 million in Q2 2026 and -$119.076 million on a trailing-twelve-month basis, with operating cash flow of -$28.503 million in the quarter, and the company has relied heavily on equity issuance, raising $527.7 million in Q2 2025 and $67.4 million in Q4 2025. Returns are deeply negative, with ROE of -41.66% and ROA of -10.65%, and the negative FCF yield (P/FCF of -116.69) confirms the company consumes rather than generates cash. At the current burn rate the $296.6 million cash balance funds roughly two to two-and-a-half years of operations, implying further dilution risk before self-funding is achievable.
Quarterly Revenue
$3076000.0B
2026-06
Revenue YoY Growth
-0.6%
YoY Comparison
Gross Margin
55.4%
Latest Quarter
Free Cash Flow
$-119076000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is QBTS Overvalued?
Because QBTS has negative net income (trailing EPS of -$0.042, quarterly net loss of -$48.0 million) and negative EBITDA (-$42.68 million), the PE ratio of -23.56 and forward PE of -28.19 are not meaningful, and the EV/EBITDA of -22.39 is likewise unusable. The appropriate primary metric is therefore price-to-sales, which stands at an extraordinary 341.62x trailing, with an EV/sales multiple of 280.04x; even against the consensus forward revenue estimate of $452.5 million, the implied forward P/S remains roughly 18.6x on the current $8.4 billion market cap. The enormous gap between trailing and forward multiples implies the market is pricing in roughly an 18-fold revenue increase, an expectation that requires flawless execution over multiple years.
Peer comparison is constrained because the provided valuation dataset contains no explicit industry-average multiples, so a direct spread cannot be quantified from the data; however, the absolute figures are instructive. A P/S of 341.62x and EV/sales of 280.04x dwarf what is typical for computer hardware companies, where single-digit to low-double-digit sales multiples are the norm, and the price-to-book of 9.86x is elevated for a company with negative returns on equity (-41.66%) and assets (-10.65%). The premium is theoretically justified only by option value on a quantum computing future, not by current growth (-0.61% revenue growth), profitability (net margin -15.61%), or competitive position, and the negative PEG ratio of -0.49 confirms that earnings-based valuation frameworks break down entirely here.
Historical context shows the multiple has compressed violently but remains extreme: the P/S ratio was 3,353.63x at Q4 2025, 2,892.22x at Q2 2026, and 1,855.37x at Q1 2026, so the current 341.62x represents a massive de-rating from prior peaks even as the absolute level stays far above any conventional benchmark. Price-to-book has fallen from 10.83x at Q4 2025 to 9.86x now, and the stock's -62.03% YTD decline reflects the market repricing the story from euphoria toward skepticism. The read-through is that valuation is no longer at its historical highs but is still priced for optimistic outcomes, meaning further multiple compression remains a live risk if revenue fails to inflect toward the consensus $452.5 million estimate.
PE
-23.6x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
18.5x
Industry PE ~18.5x*
EV/EBITDA
-22.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are acute. Revenue of $3.076 million in Q2 2026 declined -0.61% year over year, while quarterly operating costs of $56.354 million (R&D $28.239 million plus SG&A $26.743 million) run roughly 18 times revenue, producing a -$48.028 million net loss and -$42.68 million EBITDA. Gross margin has compressed from 64.8% in Q4 2025 to 63.6% in Q1 2026 to 55.4% in Q2 2026, and the business is overwhelmingly services-led (professional services $929,000 versus system sales of just $255,000), meaning hardware scale has not materialized. Trailing free cash flow of -$119.076 million against a $296.6 million cash balance (down from $635.3 million at year-end 2025) leaves roughly two to two-and-a-half years of runway and makes further equity issuance — following $527.7 million raised in Q2 2025 and $67.4 million in Q4 2025 — a live dilution risk.
Market and competitive risks center on valuation compression. At 341.62x trailing P/S and 280.04x EV/sales, QBTS trades at a massive premium to the single-digit to low-double-digit sales multiples typical of computer hardware companies, and the multiple has already de-rated from 3,353.63x at Q4 2025 and 1,855.37x at Q1 2026 — a compression trend that could continue. A beta of 2.334 means the stock is roughly 133% more volatile than the market, amplifying any sector rotation out of speculative technology; relative strength versus the S&P 500 is -71.97% over one year while SPY gained 9.59%. Competitive threats are real: a Motley Fool comparison argues Rigetti's deeper government ties and technological edge make it the better long-term bet, and the ~$100 million government award was matched by rivals with a larger award going to GlobalFoundries, undercutting any claim of unique advantage.
In a worst-case scenario, bookings fail to convert into revenue, the consensus $452.5 million estimate is slashed, and the stock re-rates toward hardware-sector norms while another dilutive raise adds shares. The realistic downside is a move to the 52-week low of $8.48, roughly -21% from the current $10.68, and a break below that level would confirm a fresh leg lower with momentum-driven selling. The -79.79% maximum drawdown shows how violent the reversal can be, and with a short ratio of 4.86 days to cover, a squeeze could produce sharp counter-trend rallies — but the structural risk is a further -20% to -40% decline if the revenue inflection slips beyond 2027.
FAQ
The most severe risk is financial: trailing free cash flow of -$119.076 million against $296.6 million in cash gives roughly two to two-and-a-half years of runway, and the company has already raised $527.7 million in Q2 2025 and $67.4 million in Q4 2025, so further dilution is likely. Second is valuation compression — a 341.62x trailing P/S has enormous room to fall toward hardware norms, and it has already de-rated from over 3,300x. Third is competitive displacement: a Motley Fool comparison favors Rigetti's deeper government ties, and the ~$100 million government award was matched by rivals with a larger award going to GlobalFoundries, undercutting any claim of unique advantage. Fourth is macro and sector rotation risk, amplified by a beta of 2.334 and a -71.97% one-year relative strength versus the S&P 500, which means speculative-tech selloffs hit this stock far harder than the market.
The 12-month outlook splits into three scenarios. The base case (50% probability, $12.00-$18.36) assumes bookings convert slowly, revenue stays in the single-digit millions per quarter, and the stock chops near its 52-week low as the multiple compresses further. The bear case (30%, $6.50-$8.48) assumes conversion stalls, the $452.5 million consensus is slashed, and a dilutive raise plus a break below the $8.48 low triggers momentum selling. The bull case (20%, $33.84-$43.00) requires a visible revenue inflection above $10 million per quarter, the government award ramping into recognized revenue, and AT&T partnership expansion, validating the consensus and driving multiple expansion. The base case is most likely, and its key assumption is that the reported bookings surge remains a pipeline rather than revenue through the next several quarters.
On any near-term fundamental basis, QBTS is deeply overvalued. Trailing price-to-sales is 341.62x and EV/sales is 280.04x, versus the single-digit to low-double-digit sales multiples typical of computer hardware companies, and price-to-book of 9.86x is elevated for a business with a -41.66% ROE. Earnings-based metrics are unusable — trailing PE of -23.56, forward PE of -28.19, and a negative PEG of -0.49 all reflect losses rather than value. Even on the $452.5 million consensus revenue estimate, the implied forward P/S is roughly 18.6x, meaning the market is pricing an approximately 18-fold revenue increase. The multiple has compressed sharply from 3,353.63x at Q4 2025 and 1,855.37x at Q1 2026, so it is well off its own history but still priced for optimistic outcomes — fairly valued only as a long-dated option on quantum commercialization.
From a risk/reward standpoint, QBTS is a high-risk speculation rather than a conventional buy. The reward case is anchored by a 15-of-16 Buy consensus and a $33.835 average target implying roughly +217% upside from $10.68, with even the lowest target of $18.36 sitting about +72% above the current price. The downside is equally concrete: revenue of $3.076 million in Q2 2026 actually declined -0.61% year over year, the stock trades at 341.62x trailing sales, and it sits just 9.2% of its 52-week range after a -62.38% one-year decline. With a beta of 2.334 and a -79.79% max drawdown, position sizing matters as much as direction. It is a reasonable buy only for investors with a multi-year horizon, tolerance for further dilution, and a small allocation sized to survive a retest of the $8.48 low.
QBTS is structurally a long-term, venture-style holding rather than a short-term trade, but only for investors who can tolerate extreme interim volatility. The company is early-stage with no dividend (payout ratio 0, yield 0), negative earnings visibility (trailing EPS -$0.042, quarterly diluted EPS -$0.13), and a beta of 2.334 that produces daily swings exceeding 15-18%, as seen in the latest +18.01% session off a $9.05 close. Short-term trading is possible given a short ratio of 4.86 days to cover and frequent squeeze-driven pops, but the -62.38% one-year and -62.03% YTD declines show how punishing momentum reversals can be. A realistic minimum holding period is three to five years, aligned with the 2027-2028 revenue base that sell-side targets implicitly assume, and any position should be sized so a retest of the $8.48 low does not force a sale.