In early 2023, shares of quantum computing company D-Wave Quantum (QBTS +0.88%) hit a low at around $0.40 -- it was a penny stock. It's up nearly 5,000% since those lows. But for my part, I wouldn't touch the stock today with a 10-foot pole.
Quantum computing is likely to be one of the most significant technological trends over the next decade. And quite encouragingly, D-Wave is quickly growing its revenue. Through the first three quarters of 2025, it's generated revenue of $22 million, which is up over 200% from the comparable period of 2024.
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Despite some positive developments at D-Wave, I believe the business is fragile. And I look for something stronger when making a long-term investment.
Is there an advantage to being first?
D-Wave really wants investors to know that it's a first mover in the quantum computing space. It reportedly sold its first quantum computer in 2011 for around $10 million. But the company appears to have been almost too early, based on the numbers since.
NYSE: QBTS
Key Data Points
In 2024, D-Wave generated revenue of just $8.8 million -- less than its initial sale 13 years earlier. During these years, the company continued to develop quantum computing technology, as did many other players in the field. But this didn't translate into consistent revenue growth.
Indeed, D-Wave's scale shows that spending from its customers is still in the early stages. In other words, some customers are experimenting with quantum computing. But there are no significant commitments to the technology yet. This is likely because of how much the technology still needs to improve.
This gives other players in the quantum computing space plenty of time to catch up to D-Wave (although it's debatable whether they're truly behind in the first place). And among those interested in winning in this industry are formidable competitors such as Alphabet, Intel, and Microsoft. It could be hard to fend off this trio.
Forecasting the future
As of Q3, there isn't much long-term visibility into D-Wave's future. The company does have some remaining performance obligations (RPOs) -- deals it's made and will generate revenue from. But its Q3 RPO of $2.9 million is down from its RPO of $4 million in the third quarter of 2024.
Likewise, D-Wave's bookings in 2025 are down 7% from this time in 2024. This doesn't necessarily mean that the company is hitting a wall. But the reality is that a few forthcoming one-time deals could make or break this growth story. There's not much to give confidence about the long-term trajectory of the business at this time.
D-Wave's management isn't helping instill any confidence either with insider trades. CEO Alan Baratz sold $43 million of his shares from May through November, an odd move if the company is on the cutting edge of a life-changing opportunity.
An investment in D-Wave Quantum stock could work out fine, and I sincerely hope that it does. But for my part, I plan to stay away because I don't believe it has a meaningful lead, and I can't be sure about what's around the corner.
