D-WAVE QUANTUM QBTS shares have surged 420.3% in the trailing six months compared with the broader Zacks Computer and Technology sector’s return of 3.7% and Internet - Software industry’s appreciation of 14.2%.

QBTS has outperformed its peers, which includes International Business Machines IBM and Alphabet GOOGL. These companies are also making strong efforts in the quantum computing space.

In late 2024, IBM launched its most advanced quantum computers, while Google’s Willow quantum chip demonstrated exceptional computational efficiency, solving tasks in minutes that would take supercomputers a much longer time. IBM and GOOGL have gained 26.4% and 2.6% in the trailing six-month period, respectively.

QBTS’ outperformance can be attributed to an expanding clientele and its growing influence in the quantum computing space.

QBTS Shares Beat Sector, Industry

QBTS Benefits From Expanding Quantum Computing Market

QBTS’ expanding portfolio in the quantum computing space has been a key catalyst. Quantum Computing-as-a-Service revenues grew 41% year over year, totaling $1.6 million in the third quarter of 2024. This was largely driven by a higher average revenue per customer, reflecting increasing demand for D-Wave’s cloud-based quantum computing services.

QBTS’ commitment to maintaining high service standards and ensuring the security of customer data has been noteworthy. In December 2024, QBTS successfully completed its second SOC 2 Type 2 audit, reaffirming its commitment to customer data security and protection while enhancing its service offerings, including tailored SLAs for the Leap quantum cloud service to support commercial-grade quantum and hybrid-quantum applications.

Further expanding its portfolio in November, QBTS announced the completion of the calibration and benchmarking of its 4,400+ qubit Advantage2 processor, marking significant performance improvements over the Advantage system in areas like optimization, AI and materials science.

Expanding international footprint has also been noteworthy. D-WAVE recently announced that Japan’s largest mobile phone operator, NTT DOCOMO, plans to deploy a hybrid-quantum application using D-Wave technology to optimize mobile network performance and reduce signal congestion.

As the quantum computing market continues to evolve, QBTS is poised to benefit from its growth. Per a Grand View Research report, the global quantum computing market is expected to witness a CAGR of 20.1% from 2024 to 2030.

QBTS’ Strong Partner Base Aids Prospects

QBTS’ partnerships with Zapata Computing Holdings, Japan Tobacco and Staque have been major growth drivers for its success.

D-Wave Quantum and Zapata AI expanded their commercial partnerships to accelerate the development of integrated quantum and generative AI solutions in D-Wave’s Leap cloud platform, focusing on improved model training, energy efficiency and optimized business processes.

D-Wave continued to broaden its customer base, including 132 customers across commercial, government and research sectors. The company saw a 66% increase in revenues from government customers and a 47% increase from research customers in the third quarter of 2024, highlighting the growing demand and recognition of quantum computing solutions across multiple industries and sectors.

Earnings Estimates for QBTS Show Upward Trend

D-WAVE’s expanding portfolio in the quantum computing space and expanding customer base are expected to benefit the company’s top-line growth.

The Zacks Consensus Estimate for 2025 revenues is currently pegged at $15.42 million, indicating an increase of 76.22% year over year.

The consensus mark for loss is currently pegged at 38 cents per share, unchanged over the past 30 days. QBTS had incurred a loss of 41 cents per share in the year-ago quarter.

D-Wave Quantum Inc. Price and Consensus

D-Wave Quantum Inc. price-consensus-chart | D-Wave Quantum Inc. Quote

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

QBTS Faces Growing Pressure From Rising Quantum Competitors

Despite expanding its portfolio and customer base, QBTS faces significant challenges from macroeconomic uncertainties and fierce competition in the rapidly evolving quantum computing market.

Competitors like Rigetti Computing RGTI, along with major players, such as IBM, Google and IonQ, are intensifying market pressures with its advancements in quantum computing technologies, potentially impacting QBTS’ financial performance.

In December 2024, RGTI launched its 84-qubit Ankaa-3 quantum computing system, featuring significant hardware enhancements and major two-qubit gate fidelity milestones, offering superior performance for algorithmic research. This move by Rigetti further bolsters its market position, potentially challenging QBTS’ performance as the market shifts toward more advanced quantum solutions.

What Should Investors Do With QBTS Stock?

QBTS stock is not so cheap, as suggested by the Value Score of F.

In terms of the forward 12-month Price/Sales, QBTS is trading at 103.34X, significantly higher than the sector’s 7.09X.

P/S Ratio (F12M)

Stretched valuation, along with stiff competition, is expected to drag down QBTS shares in the near term.

QBTS currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

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