Investors are jumping aboard D-Wave Quantum (QBTS +0.67%) stock this week. D-Wave shares drifted lower after it reported first-quarter earnings on May 12, even though the company announced record quarterly bookings and outlined a roadmap to scale its quantum technology.
Now investors are pouring back into the stock, though, with D-Wave shares soaring about 54% this week as of Friday afternoon, according to data provided by S&P Global Market Intelligence.
Image source: The Motley Fool.
What the federal grant means
This week's surge followed the National Institute of Standards and Technology (NIST), an agency under the U.S. Department of Commerce, announcing it would award $2 billion in grants to nine companies operating in the quantum computing space. D-Wave was one of those nine. The NIST will also take a minority stake in each company.
IBM was awarded half of that grant money, but D-Wave will receive $100 million, along with several other mid-cap quantum names. The funding alone, stemming from the U.S. CHIPS and Science Act, isn't what really caused D-Wave stock to rocket higher this week, though.
NYSE: QBTS
Key Data Points
D-Wave already has sufficient cash on hand. As of March 31, the company had nearly doubled its cash and marketable securities versus the prior-year period to $588 million. The company is also generating revenue with its leading annealing quantum systems.
In January, D-Wave acquired Quantum Circuits (QCI) to help it scale up gate-model quantum computers. The combination will provide customers with a complete quantum computing ecosystem, and the new U.S. government connection will go a long way toward marketing that capability. The $100 million is a great way to help expand R&D to complete its commercial offerings. The relationship with the government could be what really markets the company's capabilities, though.
That might be a good reason for investors to allocate at least a small amount to D-Wave Quantum now.
