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Rising Risks Overshadow D-Wave Quantum Booking: Sell or Hold QBTS Now?
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Key Takeaways
D-Wave Quantum's bookings surged, but Q2 revenues stayed flat year over year at about $3.1 million.
First-half bookings jumped 1,120%, while QCaaS production revenues rose to 37.3% of total QCaaS revenues.
QBTS faces wider projected losses, a 90.32X P/S ratio and uncertainty after its CFO's resignation.
D-Wave Quantum (QBTS - Free Report) and other pure-play quantum computing stocks are facing selling pressure despite the sector’s enormous long-term growth potential and encouraging technological progress through the first half of 2026.
QBTS has declined 17.9% over the past 30 days, as investors have become more cautious about the pace of commercialization, elevated losses and the ability of strong bookings to translate into near-term revenues. A similar trend can be seen from the company’s direct peers. While IonQ (IONQ - Free Report) lost 7.1%, Rigetti Computing (RGTI - Free Report) declined 13.9% during this period.
One-Month Price Comparison
Image Source: Zacks Investment Research
The company’s second-quarter results offered a mixed picture, with first-half bookings surging significantly, but the top and bottom lines falling short of the respective Zacks Consensus Estimate. Adjusted loss widened year over year.
More recently, downward revisions to QBTS’ earnings estimates are adding to investor concerns. Over the past 30 days, the third-quarter and full-year 2026 loss per share projections for QBTS were downgraded to 9 cents from 7 cents and 29 cents from 27 cents, respectively. This signals rising expectations for wider losses and also the challenges QBTS faces in translating its commercial momentum into near-term profitability.
Image Source: Zacks Investment Research
The broader market backdrop is also unfavorable for speculative growth stocks. The U.S. added 162,000 jobs in August, while unemployment held at 4.1%, boosting expectations for higher-for-longer rates. Meanwhile, Brent crude has climbed to about $97.50 a barrel amid ongoing U.S.-Iran tensions. Investors should therefore prioritize execution, revenue conversion and valuation rather than chase quantum stocks solely on long-term potential.
Strong Bookings and Growing Production Adoption
The positives are increasingly visible in D-Wave’s commercial traction. First-half bookings jumped 1,120% year over year, while remaining performance obligations rose 668%. Production applications are also gaining traction, with first-half QCaaS production revenues accounting for 37.3% of total QCaaS revenues, up from 9.8% a year earlier.
Recent customer developments provide further evidence of commercial use. AT&T agreed to expand its use of D-Wave technology across network operations, while NTT DOCOMO deployed a second production application that reduced peak location-registration signals by 65.3%.
Revenue Conversion Remains the Key Weakness
These positives are, however, yet to translate into comparable revenue growth. Second-quarter revenues were about $3.1 million, essentially flat year over year, despite the sharp increase in bookings. D-Wave also reported a $546.2-million cash and marketable securities balance at June-end, down from $819.3 million a year earlier.
Rising Losses and Macro Risks Weigh on the Stock
The gap between strong bookings and weak revenues, along with continued losses and lower earnings estimates, is weighing on the stock. CFO John Markovich’s resignation, effective Sept. 2, adds another layer of uncertainty, although the company said it was not linked to any disagreement over its business or financial reporting. With investors becoming more cautious about speculative growth stocks, QBTS needs to turn its strong bookings into revenues faster and show a clearer path to profitability to rebuild investor confidence.
Lofty Valuation
Image Source: Zacks Investment Research
QBTS stock is currently trading at a 12-month Price/Sales ratio of 90.32, compared with 4.77 for the S&P 500. Its three-year median P/S ratio stands at 90.94, close to the current multiple. This implies that the stock already carries substantial growth expectations, leaving limited room for disappointment if revenue growth or commercialization falls short of investor expectations.
Our Take
Given the sharp disconnect between bookings and revenues, continued losses, downward earnings revisions and a lofty valuation, investors should consider booking profits in QBTS now. Although D-Wave is making progress in expanding commercial applications, the stock’s high valuation leaves little room for execution setbacks. With speculative stocks facing a tougher macro environment, investors may want to wait for stronger revenue growth and improving profitability before reconsidering the stock. QBTS currently carries a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Bigstock
Rising Risks Overshadow D-Wave Quantum Booking: Sell or Hold QBTS Now?
Key Takeaways
D-Wave Quantum (QBTS - Free Report) and other pure-play quantum computing stocks are facing selling pressure despite the sector’s enormous long-term growth potential and encouraging technological progress through the first half of 2026.
QBTS has declined 17.9% over the past 30 days, as investors have become more cautious about the pace of commercialization, elevated losses and the ability of strong bookings to translate into near-term revenues. A similar trend can be seen from the company’s direct peers. While IonQ (IONQ - Free Report) lost 7.1%, Rigetti Computing (RGTI - Free Report) declined 13.9% during this period.
One-Month Price Comparison
Image Source: Zacks Investment Research
The company’s second-quarter results offered a mixed picture, with first-half bookings surging significantly, but the top and bottom lines falling short of the respective Zacks Consensus Estimate. Adjusted loss widened year over year.
More recently, downward revisions to QBTS’ earnings estimates are adding to investor concerns. Over the past 30 days, the third-quarter and full-year 2026 loss per share projections for QBTS were downgraded to 9 cents from 7 cents and 29 cents from 27 cents, respectively. This signals rising expectations for wider losses and also the challenges QBTS faces in translating its commercial momentum into near-term profitability.
Image Source: Zacks Investment Research
The broader market backdrop is also unfavorable for speculative growth stocks. The U.S. added 162,000 jobs in August, while unemployment held at 4.1%, boosting expectations for higher-for-longer rates. Meanwhile, Brent crude has climbed to about $97.50 a barrel amid ongoing U.S.-Iran tensions. Investors should therefore prioritize execution, revenue conversion and valuation rather than chase quantum stocks solely on long-term potential.
Strong Bookings and Growing Production Adoption
The positives are increasingly visible in D-Wave’s commercial traction. First-half bookings jumped 1,120% year over year, while remaining performance obligations rose 668%. Production applications are also gaining traction, with first-half QCaaS production revenues accounting for 37.3% of total QCaaS revenues, up from 9.8% a year earlier.
Recent customer developments provide further evidence of commercial use. AT&T agreed to expand its use of D-Wave technology across network operations, while NTT DOCOMO deployed a second production application that reduced peak location-registration signals by 65.3%.
Revenue Conversion Remains the Key Weakness
These positives are, however, yet to translate into comparable revenue growth. Second-quarter revenues were about $3.1 million, essentially flat year over year, despite the sharp increase in bookings. D-Wave also reported a $546.2-million cash and marketable securities balance at June-end, down from $819.3 million a year earlier.
Rising Losses and Macro Risks Weigh on the Stock
The gap between strong bookings and weak revenues, along with continued losses and lower earnings estimates, is weighing on the stock. CFO John Markovich’s resignation, effective Sept. 2, adds another layer of uncertainty, although the company said it was not linked to any disagreement over its business or financial reporting. With investors becoming more cautious about speculative growth stocks, QBTS needs to turn its strong bookings into revenues faster and show a clearer path to profitability to rebuild investor confidence.
Lofty Valuation
Image Source: Zacks Investment Research
QBTS stock is currently trading at a 12-month Price/Sales ratio of 90.32, compared with 4.77 for the S&P 500. Its three-year median P/S ratio stands at 90.94, close to the current multiple. This implies that the stock already carries substantial growth expectations, leaving limited room for disappointment if revenue growth or commercialization falls short of investor expectations.
Our Take
Given the sharp disconnect between bookings and revenues, continued losses, downward earnings revisions and a lofty valuation, investors should consider booking profits in QBTS now. Although D-Wave is making progress in expanding commercial applications, the stock’s high valuation leaves little room for execution setbacks. With speculative stocks facing a tougher macro environment, investors may want to wait for stronger revenue growth and improving profitability before reconsidering the stock. QBTS currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.