D-Wave Quantum (QBTS +3.02%) has endured a brutal sell-off. Uncertainty surrounding artificial intelligence (AI) spread to the quantum industry, and amid high valuations, some investors sold.
Still, seeing the price drop by two-thirds tends to substantially change investment theses. Is that enough of a change to attract buyers to the quantum computing stock?
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The D-Wave Quantum advantage
D-Wave Quantum differentiates itself as the "practical quantum computing company." It leverages quantum annealing, which helps find the "lowest energy state," or most efficient solution to a problem.
Also, quantum computing tends to struggle with generating errors. However, D-Wave quantum also uses annealing to reduce such interference, allowing users to better capitalize on the technology's faster speeds.
This approach also allows it to solve real-world problems. Those can range from improved portfolio optimization in finance to minimizing the downtimes for maintenance and repairs at manufacturing facilities.
Additionally, this shift to practical applications is a notable accomplishment for a technology that once struggled to advance beyond research-related studies. It has even allowed for on-premise use, which means it does not necessarily have to rely on the cloud. With these offerings, it has attracted business from more than 70 commercial customers.
Effects on financials
As previously mentioned, the rising popularity did not stop D-Wave Quantum stock from falling by about two-thirds from its high last fall. Still, amid high volatility, it is up by more than 35% since its initial public offering (IPO).
NYSE: QBTS
Key Data Points
However, the stock's movements may be a product of its financials. Its $25 million in revenue in 2025 is up by 180% from year-ago levels.
Unfortunately, the company also has to spend heavily to stay competitive against other quantum start-ups and tech giants such as Alphabet and IBM. Consequently, its $355 million net loss in 2025 was up from losses of $144 million in the previous year.
Despite those losses, negative free cash flows were around $76 million last year. Yet its $884 million in liquidity indicates it will stay in business for the foreseeable future.
Nonetheless, the number of outstanding shares rose by 27% last year, an indication that the company capitalized on a high share price and thus diluted shareholders to raise more funds.
Moreover, shareholders must contend with a price-to-sales (P/S) ratio of around 180, a stratospheric level considering that the average S&P 500 sales multiple is just above 3. Hence, even with the pullback, investors still have to pay a massive premium to buy this stock.
Is it time to buy D-Wave Quantum stock?
As conditions stand today, the fundamentals show no reason to buy D-Wave Quantum stock at these levels. Admittedly, valuation did not stop last year's run-up in the stock, and the possibility of a recovery could draw in speculative investors.
Nonetheless, D-Wave is likely years away from profitability, if it ever occurs. Moreover, it faces well-funded peers that may out-compete it over time. Thus, investors who think D-Wave Quantum is either their ticket to becoming a millionaire or even a market-beating investment may need to rethink that thesis.
