D-Wave Quantum (QBTS +0.93%) benefited from the bull market in quantum computing stocks in 2025. Amid those gains, the stock rose more than 380% over the previous 12 months. Unfortunately, such gains leave prospective investors wondering what to do about this stock. Should they interpret that gain as a signal to buy D-Wave Quantum stock, or does it signify that the stock's run has ended and investors should stay away?
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Why D-Wave Quantum
At first glance, D-Wave Quantum may look similar to other emerging quantum computing companies. Quantum computing promises exponentially faster speeds than traditional computing. That advancement points to potential applications in fields ranging from materials science to finance to cybersecurity.
To that end, many companies, including D-Wave Quantum, have emerged with the explicit purpose of capitalizing on this opportunity. The company bills itself as the "practical quantum computing company," and as that moniker implies, its unique approach is to foster large-scale commercial applications. That helps the industry address a perception that quantum computing is primarily a research tool.
More recently, D-Wave also announced a breakthrough in the technology. One challenge has been to gather enough bits to run an application while keeping the bits cool enough to function properly. The company claims it has solved this problem through multiplexing (which improves chip communication), bump bonding (stacking a control chip and a quantum processing unit), and controlling quantum bits (qubits) through the use of magnetic fields.
Assessing D-Wave Quantum's financials
Additionally, the company said in the quarterly report in the third quarter of 2025 that it had $836 million in liquidity, giving it more investment capital for research. However, the financials also highlight the difficulties that come with investing in D-Wave Quantum stock. Its revenue in the first nine months of 2025 was just under $22 million, a 235% increase compared to the same period in 2024.
Unfortunately, that rise did little to offset the increase in operating expenses. Also, the results took a hit from a $260 million change in the change in fair value of warrant liabilities. Consequently, D-Wave's net loss in the first three quarters of 2025 was $313 million, up from a $58 million loss in the same year-ago period.
Still, while the net losses may appear concerning, the $56 million in negative free cash flow for the first nine months of 2025 is a more critical figure to investors. Along with the $836 million in cash, the $56 million in negative free cash flow implies that D-Wave Quantum can stay in business and maintain its current pace of innovation for the foreseeable future.
NYSE: QBTS
Key Data Points
Furthermore, the rising losses did not stop investors from bidding its stock price higher, and the forecasted revenue growth of 190% for 2025 and 55% in 2026 points to slowing but still robust increases in revenue.
Still, valuation metrics indicate that speculation has driven the stock. Ongoing losses leave it without a P/E ratio, and a price-to-sales (P/S) ratio exceeding 350 implies that the stock price has disconnected from the company's fundamentals. Such predictions leave investors with no clue about where the stock could go next.
Is it time to buy D-Wave Quantum stock?
Considering the company's financials and the stock's valuation, long-term investors should probably avoid this stock. If sales of its commercial computers take off and sustain their popularity, that could justify the recent stock price gains. But the company's continued success is not guaranteed despite the recent breakthroughs.
Moreover, the highly elevated P/S ratio makes it difficult for prospective investors to justify buying the stock, even with its massive revenue growth. Ultimately, while its successes in commercial quantum computing and technical breakthroughs give the company potential, the cost of this stock and the uncertainties surrounding it make D-Wave Quantum too speculative to touch.
