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QBTS Momentum Builds Post Q3 But Valuation Risk Stays: Buy or Wait?
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Key Takeaways
D-Wave's Q3 revenues doubled year over year, beating estimates by nearly 20%.
Gross margins jumped over 1,000 bps as bookings surged 80% sequentially to $2.4 million.
Cash reserves rose to $836.2 million, though valuation remains elevated at 250.58x P/S.
Investors seeking long-term upside should take a close look at pure-play quantum computing stocks like D-Wave Quantum (QBTS - Free Report) . Despite the short-term fluctuations inherent in a nascent capital-intensive industry, the company’s third-quarter 2025 results show a combination of commercial traction, technological advancement and cash runway.
Let's delve deeper.
Q3 Snapshot
In the third quarter of 2025, D-Wave’s revenues rose 100% year over year and 8% sequentially. Revenues beat the Zacks Consensus Estimate by 19.8%.
GAAP gross profit was up 156% year over year with gross margin expanding 1,560 basis points (bps) to 71.4%. Adjusted gross profit was up 131% year over year, with adjusted gross margin at 77.7% (a 1,050 bps expansion). Operating loss widened to $27.7 million from $20.6 million a year ago.
Image Source: Zacks Investment Research
Adjusted net loss was $18.1 million (adjusted loss of 5 cents per share), improving from the prior year’s adjusted loss of $23.2 million (adjusted loss of 12 cents per share).
Cash and equivalents were $836.2 million as of Sept. 30, 2025, compared with $819.3 million as of the end of the second quarter.
While no formal guidance was provided for future quarters, management noted that operating expenses are expected to increase approximately 15% sequentially in the second half of 2025, with continued investment into R&D and go-to-market capabilities.
Commercial Traction
D-Wave Quantum continues to witness strong growth in customer demand. In the third quarter, the company reported bookings of $2.4 million (up 80% sequentially) and subsequently announced a €10 million ($11 million) contract for half the capacity of its Advantage2 system in Italy, which will contribute to future revenue streams. Additionally, D-Wave highlighted customer engagements with large enterprises and governments, from a major U.S. airline and a leading semiconductor foundry to a top global chemical company and a national police force.
Technological Advancement
D-Wave emphasizes its dual-track strategy spanning annealing and gate-model superconducting quantum systems, asserting that its annealing systems are commercially viable today while the gate-model roadmap builds toward scale. Its newest Advantage2 system, now operational in the United States for defense use and the recent fabrication of fluxonium qubit chips and superconducting control chips mark tangible progress toward a scalable gate-model architecture. These advances, coupled with improved gross margins, reflect growing operational efficiency as the technology matures.
Solid Financial Position
At the end of the third quarter, D-Wave held $836.2 million in cash and equivalents, a significant increase compared with $29.3 million a year ago. This liquidity provides considerable flexibility to fund R&D, scale go-to-market efforts and absorb near-term operating losses while the quantum market develops. Although management expects operating expenses to rise in the second half of 2025 as investments accelerate, the strong cash cushion significantly mitigates execution risk in the near term.
Image Source: Zacks Investment Research
YTD Stock Comparison
Image Source: Zacks Investment Research
Year to date, shares of QBTS have rallied 245.1%, outperforming the broader industry’s 10.3% growth, the sector’s 27.5% growth and the S&P 500’s 18% improvement. The stock also remained well ahead of its peers like Rigetti (RGTI - Free Report) and IonQ (IONQ - Free Report) , which grew 105.7% and 30.2% respectively, during this period.
Valuation Remains Stretched
D-Wave Quantum’s 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 250.58X, significantly higher than its one-year median of 151.70X and the Zacks Computer and Technology sector’s 6.91X. The stock is also trading at a premium to IONQ’s 112.43X. However, it remains discounted compared to RGTI’s P/S of 480.97X.
Price/Sales Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Bottom Line
Given the sharp year-to-date rally and stretched valuation multiples, it's better for new investors to wait for a better entry point before adding exposure to D-Wave Quantum, a Zacks Rank #3 (Hold) stock right now. While the company’s fundamentals, rising bookings, expanding margins and strong liquidity highlight solid long-term potential, the stock’s current forward P/S leaves little room for near-term upside. With management guiding for higher operating expenses in the second half of 2025 and the broader quantum market still in an early monetization phase, any slowdown in deal flow or project execution could trigger volatility. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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QBTS Momentum Builds Post Q3 But Valuation Risk Stays: Buy or Wait?
Key Takeaways
Investors seeking long-term upside should take a close look at pure-play quantum computing stocks like D-Wave Quantum (QBTS - Free Report) . Despite the short-term fluctuations inherent in a nascent capital-intensive industry, the company’s third-quarter 2025 results show a combination of commercial traction, technological advancement and cash runway.
Let's delve deeper.
Q3 Snapshot
In the third quarter of 2025, D-Wave’s revenues rose 100% year over year and 8% sequentially. Revenues beat the Zacks Consensus Estimate by 19.8%.
GAAP gross profit was up 156% year over year with gross margin expanding 1,560 basis points (bps) to 71.4%. Adjusted gross profit was up 131% year over year, with adjusted gross margin at 77.7% (a 1,050 bps expansion). Operating loss widened to $27.7 million from $20.6 million a year ago.
Image Source: Zacks Investment Research
Adjusted net loss was $18.1 million (adjusted loss of 5 cents per share), improving from the prior year’s adjusted loss of $23.2 million (adjusted loss of 12 cents per share).
Cash and equivalents were $836.2 million as of Sept. 30, 2025, compared with $819.3 million as of the end of the second quarter.
While no formal guidance was provided for future quarters, management noted that operating expenses are expected to increase approximately 15% sequentially in the second half of 2025, with continued investment into R&D and go-to-market capabilities.
Commercial Traction
D-Wave Quantum continues to witness strong growth in customer demand. In the third quarter, the company reported bookings of $2.4 million (up 80% sequentially) and subsequently announced a €10 million ($11 million) contract for half the capacity of its Advantage2 system in Italy, which will contribute to future revenue streams. Additionally, D-Wave highlighted customer engagements with large enterprises and governments, from a major U.S. airline and a leading semiconductor foundry to a top global chemical company and a national police force.
Technological Advancement
D-Wave emphasizes its dual-track strategy spanning annealing and gate-model superconducting quantum systems, asserting that its annealing systems are commercially viable today while the gate-model roadmap builds toward scale. Its newest Advantage2 system, now operational in the United States for defense use and the recent fabrication of fluxonium qubit chips and superconducting control chips mark tangible progress toward a scalable gate-model architecture. These advances, coupled with improved gross margins, reflect growing operational efficiency as the technology matures.
Solid Financial Position
At the end of the third quarter, D-Wave held $836.2 million in cash and equivalents, a significant increase compared with $29.3 million a year ago. This liquidity provides considerable flexibility to fund R&D, scale go-to-market efforts and absorb near-term operating losses while the quantum market develops. Although management expects operating expenses to rise in the second half of 2025 as investments accelerate, the strong cash cushion significantly mitigates execution risk in the near term.
Image Source: Zacks Investment Research
YTD Stock Comparison
Image Source: Zacks Investment Research
Year to date, shares of QBTS have rallied 245.1%, outperforming the broader industry’s 10.3% growth, the sector’s 27.5% growth and the S&P 500’s 18% improvement. The stock also remained well ahead of its peers like Rigetti (RGTI - Free Report) and IonQ (IONQ - Free Report) , which grew 105.7% and 30.2% respectively, during this period.
Valuation Remains Stretched
D-Wave Quantum’s 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 250.58X, significantly higher than its one-year median of 151.70X and the Zacks Computer and Technology sector’s 6.91X. The stock is also trading at a premium to IONQ’s 112.43X. However, it remains discounted compared to RGTI’s P/S of 480.97X.
Price/Sales Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Bottom Line
Given the sharp year-to-date rally and stretched valuation multiples, it's better for new investors to wait for a better entry point before adding exposure to D-Wave Quantum, a Zacks Rank #3 (Hold) stock right now. While the company’s fundamentals, rising bookings, expanding margins and strong liquidity highlight solid long-term potential, the stock’s current forward P/S leaves little room for near-term upside. With management guiding for higher operating expenses in the second half of 2025 and the broader quantum market still in an early monetization phase, any slowdown in deal flow or project execution could trigger volatility. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.