Many quantum computing stocks have been on fire in 2025, as investors seek the next big thing in tech. D-Wave Quantum (QBTS 5.55%) has benefited from the surge in interest in quantum computing, with its share price increasing by 390% over the past year.
With such a great year for D-Wave investors, can they expect more of the same over the next 12 months?
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Sales will likely continue to be minimal
D-Wave sells its quantum computing services to companies, offering a full-stack solution that includes everything from software to its Advantage2 quantum computer hardware. The company is betting on a potentially significant quantum computing market, which could be worth $100 billion by 2035.
But it's important to note that the company has minimal sales right now and they're not likely to increase substantially over the next year. Some D-Wave bulls like to point to the fact that revenue doubled in the third quarter as a sign D-Wave is on the right track. While notable, I think it's more important to focus on the fact that D-Wave's revenue was just $3.7 million in the quarter.
Those sales are minuscule compared to the company's net loss of $140 million in the quarter. What's more, D-Wave's losses are widening, as operating expenses rose by 40% to $30 million. This pattern will likely continue over the next year as D-Wave tries to expand its services and invests in new technology.
Most predictions for when the quantum computing market will have real-world use cases say that companies are still about five years away from reaching that goal. Even quantum computing rival Rigetti Computing has said that it won't see tangible revenue from its services until three to five years from now.
All of which means that D-Wave and the larger quantum computing market likely won't make meaningful progress with their sales over the next year.
D-Wave's shares will continue to be wildly overvalued
D-Wave's substantial losses and minimal revenue haven't deterred investors from pushing up the company's share price to astronomical heights. But the huge gains it's made in such a short time, paired with its lack of sales and earnings, means that D-Wave's shares are now very expensive.
D-Wave's stock has a price-to-sales ratio of 286, which is far higher than the tech sector's average P/S ratio of under 9. With such a high valuation, even if D-Wave's shares tumble over the year, they'll still be overpriced.
Investors have been overly excited about the quantum computing market, despite many of its real-world use cases still being years away. Part of the reason for the euphoria is that investors haven't wanted to miss out on new tech trends, and are assuming that getting in on quantum computing stocks now is like buying artificial intelligence (AI) stocks a few years ago.
The problem with this strategy is that most quantum computing companies, including D-Wave, aren't even close to profitable, while many leading AI companies are very profitable. Investors are trying to ride the wave of AI and quantum computing as if they're one big tech trend, but there are far less tangible benefits from quantum computing than from AI right now.
NYSE: QBTS
Key Data Points
D-Wave is too risky to own over the next year
While it may seem like the good times won't end for D-Wave right now, with its shares priced for perfection, I think investors are taking a considerable risk by owning the company's stock.
Consider that the latest jobs report showed the U.S. added 64,000 jobs in November, but the unemployment rate ticked higher to 4.6%. More concerning was that October jobs figures showed a loss of 105,000 -- the third time in six months that jobs growth fell into negative territory.
Speculative investments tend to fall the hardest when economic uncertainty comes. If jobs and economic data continue to move in a negative direction over the next year, I think D-Wave's shares will likely decline as investors opt for less speculative investments.
