Quantum computing specialist D-Wave Quantum (QBTS 5.55%) has been on a thrill ride recently. As of Dec. 10, the stock has gained an eye-popping 2,470% from Nov. 1, 2024. It's also down 40% from October's all-time peak.
Trading at $27.30 per share at the moment, D-Wave's stock is back below $30 per share after soaring as high as $46.75. Is this dip a great time to load up on D-Wave stock?
NYSE: QBTS
Key Data Points
Hold your horses, quantum fans
In a word: No.
I mean, I get it. D-Wave is working in one of the most exciting industries in recent memory. Quantum computing should eventually disrupt all sorts of number-crunching tasks, from financial analysis and medical research to cryptography and process optimization.
D-Wave walks a different path than today's peers. From IonQ and Rigetti Computing to Alphabet and IBM, the headline-writing focus is on gate-based quantum computing. That approach can produce exact results to complicated pattern-finding problems -- the stuff you need in order to solve the math riddles mentioned above.
Meanwhile, D-Wave's research revolves around quantum annealing. That's a faster way to find estimates instead of exact results.
On a large-enough scale, that's still good for tasks where approximations are nearly as good as a precise result. "Almost" cracking an encryption algorithm is a failure, but finding the second-best driving route from Fenway Park to your neighborhood on the west side of Boston is almost always good enough (and an impressive feat, anyway).
If nothing else, annealing may become a helpful first step to start the quantum gate process get close to the correct answer.
Image source: Getty Images.
Great tech, scary price tag
However, it's too early to pick winners in this marathon, and others may swarm to D-Wave's chosen field of expertise. Meanwhile, D-Wave's stock is valued at $9.53 billion -- 395x its $24 million in trailing sales.
That's a lofty valuation for a risky stock. The stock may be down from a speculative high, but it's still much too expensive for my taste.
