D-Wave Quantum (QBTS +7.75%) has been one of several big stock movers in the quantum computing sector this year. But while its share price has tripled year to date, it hasn't been a smooth ride for shareholders.
D-Wave's stock has also been cut nearly in half since it peaked in October, and in the wake of that slump, some Wall Street firms have initiated coverage of the company and rated the shares a buy. D-Wave's sixth-generation Advantage2 is one of the leading quantum computing systems, and it could be what gives D-Wave an edge over its rivals.
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Is explosive growth imminent?
D-Wave's Advantage2 quantum annealing system is now commercially available either through a cloud service or for on-site installation. According to the company, the energy-efficient system "is designed to help businesses accelerate decision-making, streamline operations, and respond to disruptions with greater agility."
D-Wave's quantum annealing systems differ from the types of quantum computers that most other players in the sector are working on. They are suitable for a narrower range of use cases. But they look extremely promising for optimization and sampling problems -- categories that include complex problems faced in logistics, finance, materials science, and AI development.
Wall Street analysts see D-Wave's differentiation as a key reason why it could outperform. Jefferies projects a 73% compound annual revenue growth for the company for the remainder of the decade.
NYSE: QBTS
Key Data Points
What remains in question is whether companies and institutions will adopt the new technology. There's a real risk they won't come around to it rapidly. But D-Wave has more than $800 million in cash on its balance sheet and only about $35 million in long-term debt. That should allow it bridge any gap associated with slow customer uptake, which adds to the argument that it's a good choice for investors seeking exposure to the quantum computing space.
