Artificial intelligence (AI) investing may be all the rage, but there's another technological trend on the horizon: quantum computing. Investors are growingly excited about the potential quantum computing stocks could have in the AI realm, and some of these stocks could be primed to surge before the year is over.
One stock that investors have their eyes on is D-Wave Quantum (QBTS 0.76%). D-Wave Quantum is taking a unique approach to the quantum computing industry, and it may be enough to set it apart from its peers. But can it surge 52% before the year is over?
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The quantum computing realm is full of deep-pocketed competitors.
Quantum computing is becoming a crowded field. In addition to the pure plays like D-Wave Quantum, there are also several legacy tech companies like Alphabet (GOOG +0.40%) (GOOGL 0.62%) and Microsoft (MSFT 0.17%) that are competing in this space.
Companies like those two will be hard to compete against, as they have nearly unlimited resources compared to the much smaller start-ups. As a result, when I'm considering quantum computing investments, I'm looking for companies that can stand out versus the competition. That could be in leadership, but where I really want to see something different is in technology.
NYSE: QBTS
Key Data Points
While most competitors in the quantum computing race are looking to build a general-purpose quantum computing unit that can be deployed similarly to a graphics processing unit (GPU), D-Wave is taking a different approach. D-Wave uses a technique known as quantum annealing, which identifies the lowest energy point in a system. This is the optimized solution for a problem, making D-Wave's technology excellent for any optimization problem. Examples of this include logistics networks, weather modeling, AI inference, and statistics.
Those are some of the most important applications of quantum computing, and having a platform that can excel in those areas is still a strong investment proposition.
But is there a chance its stock will rise by the end of 2025?
Most of D-Wave's movements will be related to market sentiment
The reality is that we're still several years away from useful quantum computing. Most companies point toward 2030 before commercially viable quantum computing is available. This is evident in D-Wave's Q3 results, as its revenue only totaled $3.7 million (up 100% year over year). D-Wave is surviving off of external investments and research partnerships, and will remain that way until commercially viable quantum computing technology comes to market.
Even then, there's no guarantee that D-Wave will produce the winning product, making the stock as likely to go to zero as it is to soar. With D-Wave being a high-risk, high-reward stock, investors must know their risk tolerance before taking a position in D-Wave.
Additionally, because we're still a long way out from useful quantum computing, most of D-Wave's stock movements will come from general market sentiment. If the market is more risk-averse (as it's becoming now), stocks like D-Wave will struggle.
If it is a risk-on scenario, then D-Wave's stock will rise. That's really what's driving D-Wave's stock price now, as most of the announcements and partnerships won't mean a lot a few years down the road.
So, can D-Wave rise 52% to regain its all-time high before the year is over? I'd say it depends on whether the market wants to go back to that risk-on sentiment. If it does, I wouldn't be surprised to see its stock surge heading into 2026 as fund managers purchase the hottest growth stocks. If managers want to be a bit more conservative, then I could see D-Wave's stock selling off even more to end the year.
