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QBTS Stock Jumps After Q2 But Profit Woes Cloud Outlook: Time to Sell?
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Key Takeaways
QBTS Q2 revenues rose 42% YoY, fueled by Advantage2 sales and adoption by major global clients.
New contracts with GE Vernova, Nikon, and NTT DOCOMO expand QBTS' reach across multiple industries.
High valuation and ongoing losses weigh on QBTS despite strong growth and global partnerships.
D-Wave Quantum’s (QBTS - Free Report) stock has risen 8.6% since its Aug. 7, 2025 second-quarter earnings release despite a miss as investors cheered business momentum and customer growth. Revenues jumped 42% year over year, driven by sales of the Advantage2 quantum processing unit and rising adoption by major clients like GE Vernova, Nikon and NTT DOCOMO. With new global partnerships and advances in hybrid quantum-classical technology, the company has strengthened its position in commercial quantum annealing.
While near-term profitability remains out of sight, these developments have boosted investor confidence, though the question remains whether continuing to invest in the stock is the right call. Let’s take a closer look.
Key Growth Factors Keeping Investor Sentiment Bullish for D-Wave
Advantage2 Strengthens Market Position in Europe: D-Wave revenues climbed significantly in the second quarter, fueled by the deployment of the Advantage2 quantum processing unit at Germany’s Julich Supercomputing Center. This installation represents more than just a one-off hardware sale. It is a flagship reference point for D-Wave’s annealing architecture within Europe’s high-performance computing ecosystem. By embedding Advantage2 into a major research facility, D-Wave gains both technical validation and a showcase environment that can attract further institutional and enterprise customers seeking optimization-focused quantum solutions. The deal also demonstrates the company’s ability to commercialize its next-generation systems while sustaining engagement with publicly funded supercomputing projects, which often lead to longer-term research and service contracts.
High-Profile Contracts and Global Partnerships: D-Wave expanded its commercial base with marquee contracts from GE Vernova, Nikon and NTT DOCOMO, alongside strategic international agreements. These clients span sectors from renewable energy to precision manufacturing and telecommunications, signaling that D-Wave’s technology is finding traction across diverse industries. Converting collaborations with such globally recognized brands into paid engagements not only strengthens near-term revenues but also enhances credibility with prospective customers. Moreover, international partnerships deepen the company’s access to markets in Asia and Europe, broadening the sales funnel and creating opportunities for multi-year, multi-system deployments that could increase recurring revenues from both cloud access and ongoing support services.
QBTS Outperforms Industry, Sector and Peers Since Q2 Release
Image Source: Zacks Investment Research
Hitches Remain
Yet, the quarter also revealed the constraints of D-Wave’s current trajectory. Despite robust top-line growth, the company remains unprofitable, with operating losses highlighting the heavy capital requirements of advancing both proprietary hardware and cloud-based quantum services. This burn rate reflects the dual challenge of funding next-generation system development while also scaling infrastructure to meet potential enterprise demand, an investment cycle that may stretch the company’s cash reserves unless revenue growth accelerates meaningfully.
Further, D-Wave’s exclusive focus on quantum annealing, while giving it dominance in a specialized optimization niche, also draws skepticism in a market leaning toward gate-model architectures. Competitors like IonQ (IONQ - Free Report) , Rigetti (RGTI - Free Report) and IBM (IBM - Free Report) are developing fault-tolerant gate-based systems aimed at a wider range of problems and attracting significant funding. To stay relevant, D-Wave must prove that its annealing technology can compete alongside these players or risk losing ground if the industry settles on a single preferred approach.
FY25 Estimates for QBTS
The Zacks Consensus Estimate for D-Wave Quantum’s 2025 earnings and revenues implies 73.3% and 181.5% improvement, respectively, from 2024.
Image Source: Zacks Investment Research
QBTS Stock Trading at a Premium
D-WAVE QUANTUM shares are currently overvalued, as suggested by its Value Score of F.
In terms of the forward 12-month price/sales (P/S), QBTS is trading at 159.38X, significantly higher than its one-year median of 88.15X and the Zacks Computer and Technology sector’s 6.71X.
Price/Sales Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Final Take
Despite its impressive revenue growth, client wins and strengthened international presence, D-Wave remains a Zacks Rank #4 (Sell) stock due to its stretched valuation, persistent operating losses and the capital-intensive nature of its technology roadmap.
The stock’s forward price-to-sales multiple is far above both its historical median and sector averages, leaving little margin for error if growth slows. Moreover, well-funded competitors like Rigetti, IBM and IonQ are advancing gate-model quantum systems with broader applicability, intensifying the strategic risk for D-Wave if market preference shifts. These factors make the near-term risk/reward profile less attractive despite the stock’s long-term potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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QBTS Stock Jumps After Q2 But Profit Woes Cloud Outlook: Time to Sell?
Key Takeaways
D-Wave Quantum’s (QBTS - Free Report) stock has risen 8.6% since its Aug. 7, 2025 second-quarter earnings release despite a miss as investors cheered business momentum and customer growth. Revenues jumped 42% year over year, driven by sales of the Advantage2 quantum processing unit and rising adoption by major clients like GE Vernova, Nikon and NTT DOCOMO. With new global partnerships and advances in hybrid quantum-classical technology, the company has strengthened its position in commercial quantum annealing.
While near-term profitability remains out of sight, these developments have boosted investor confidence, though the question remains whether continuing to invest in the stock is the right call. Let’s take a closer look.
Key Growth Factors Keeping Investor Sentiment Bullish for D-Wave
Advantage2 Strengthens Market Position in Europe: D-Wave revenues climbed significantly in the second quarter, fueled by the deployment of the Advantage2 quantum processing unit at Germany’s Julich Supercomputing Center. This installation represents more than just a one-off hardware sale. It is a flagship reference point for D-Wave’s annealing architecture within Europe’s high-performance computing ecosystem. By embedding Advantage2 into a major research facility, D-Wave gains both technical validation and a showcase environment that can attract further institutional and enterprise customers seeking optimization-focused quantum solutions. The deal also demonstrates the company’s ability to commercialize its next-generation systems while sustaining engagement with publicly funded supercomputing projects, which often lead to longer-term research and service contracts.
High-Profile Contracts and Global Partnerships: D-Wave expanded its commercial base with marquee contracts from GE Vernova, Nikon and NTT DOCOMO, alongside strategic international agreements. These clients span sectors from renewable energy to precision manufacturing and telecommunications, signaling that D-Wave’s technology is finding traction across diverse industries. Converting collaborations with such globally recognized brands into paid engagements not only strengthens near-term revenues but also enhances credibility with prospective customers. Moreover, international partnerships deepen the company’s access to markets in Asia and Europe, broadening the sales funnel and creating opportunities for multi-year, multi-system deployments that could increase recurring revenues from both cloud access and ongoing support services.
QBTS Outperforms Industry, Sector and Peers Since Q2 Release
Image Source: Zacks Investment Research
Hitches Remain
Yet, the quarter also revealed the constraints of D-Wave’s current trajectory. Despite robust top-line growth, the company remains unprofitable, with operating losses highlighting the heavy capital requirements of advancing both proprietary hardware and cloud-based quantum services. This burn rate reflects the dual challenge of funding next-generation system development while also scaling infrastructure to meet potential enterprise demand, an investment cycle that may stretch the company’s cash reserves unless revenue growth accelerates meaningfully.
Further, D-Wave’s exclusive focus on quantum annealing, while giving it dominance in a specialized optimization niche, also draws skepticism in a market leaning toward gate-model architectures. Competitors like IonQ (IONQ - Free Report) , Rigetti (RGTI - Free Report) and IBM (IBM - Free Report) are developing fault-tolerant gate-based systems aimed at a wider range of problems and attracting significant funding. To stay relevant, D-Wave must prove that its annealing technology can compete alongside these players or risk losing ground if the industry settles on a single preferred approach.
FY25 Estimates for QBTS
The Zacks Consensus Estimate for D-Wave Quantum’s 2025 earnings and revenues implies 73.3% and 181.5% improvement, respectively, from 2024.
Image Source: Zacks Investment Research
QBTS Stock Trading at a Premium
D-WAVE QUANTUM shares are currently overvalued, as suggested by its Value Score of F.
In terms of the forward 12-month price/sales (P/S), QBTS is trading at 159.38X, significantly higher than its one-year median of 88.15X and the Zacks Computer and Technology sector’s 6.71X.
Price/Sales Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Final Take
Despite its impressive revenue growth, client wins and strengthened international presence, D-Wave remains a Zacks Rank #4 (Sell) stock due to its stretched valuation, persistent operating losses and the capital-intensive nature of its technology roadmap.
The stock’s forward price-to-sales multiple is far above both its historical median and sector averages, leaving little margin for error if growth slows. Moreover, well-funded competitors like Rigetti, IBM and IonQ are advancing gate-model quantum systems with broader applicability, intensifying the strategic risk for D-Wave if market preference shifts. These factors make the near-term risk/reward profile less attractive despite the stock’s long-term potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.