D-Wave Quantum (QBTS) Stock Earns Buy Rating as Revenue Path Separates It From Quantum Rivals

TLDR

• TD Cowen analyst Krish Sankar initiated coverage on D-Wave Quantum (QBTS) with a Buy rating, highlighting the company’s real revenue generation unlike most quantum computing peers
• TD Cowen projects D-Wave revenue to jump from $26 million in 2025 to $135 million by 2028, representing over 70% annual growth
• D-Wave’s recent acquisition of Quantum Circuit Inc. technology could accelerate processor development and enable AI and machine-learning applications
• The company’s Advantage systems sell for $20-40 million per unit with high margins, while cloud services continue gaining traction
• All 12 analysts covering QBTS rate it a Strong Buy with an average price target of $41.25, implying 110% upside from current levels

TD Cowen launched coverage on D-Wave Quantum (QBTS) Thursday with a Buy rating. Top analyst Krish Sankar said the company stands out in the quantum computing space because it already generates real revenue.

D-Wave Quantum Inc., QBTS

The distinction matters in an industry where most players remain in the research phase. D-Wave sells both hardware systems and cloud access to its quantum computers.

Companies use D-Wave’s technology for practical applications like scheduling and logistics. Sankar expects adoption to grow as more businesses test quantum tools.

TD Cowen projects D-Wave will generate approximately $26 million in revenue for 2025. That figure should climb to roughly $135 million by 2028, implying annual growth exceeding 70%.

The revenue model includes high-margin enterprise system sales. Each Advantage system sells for $20 million to $40 million per unit.

D-Wave’s cloud service provides another revenue stream. The Leap quantum cloud service allows companies to access computing power without buying hardware.

Acquisition Accelerates Development Timeline

D-Wave recently acquired Quantum Circuit Inc. technology. Sankar said the deal could speed up development of future processors.

The acquisition opens potential for AI and machine-learning workloads later this decade. D-Wave’s newly acquired QCI DRQ technology pushes fidelity rates above 99.9%.

That technical milestone matters for expanding the company’s addressable market. Higher fidelity rates mean more types of problems can be tackled.

Strong Balance Sheet Enables Growth Strategy

Sankar pointed to D-Wave’s financial position as an advantage. The company holds more cash than debt with a current ratio of 54.68.

The debt-to-equity ratio sits at just 0.06. This financial flexibility allows D-Wave to pursue acquisitions and accelerate product launches.

D-Wave posted 156.2% revenue growth over the last twelve months. Gross profit margin reached 82.82%.

The company reported 314% growth in Advantage2 annealing quantum computer usage over the past year. Stride hybrid solver usage jumped 114% in the last six months.

D-Wave secured a $10 million, two-year enterprise Quantum Computing as a Service agreement with a Fortune 100 company. The deal involves developing and deploying multiple quantum-powered applications.

Analyst Consensus Points to Major Upside

Sankar ranks as the 10th best analyst out of 12,108 tracked on TipRanks. His success rate sits at 66% with an average return per rating of 41.90%.

Wall Street shows strong conviction on D-Wave. All 12 analysts covering the stock rate it a Strong Buy.

The average price target of $41.25 implies 110% upside from current levels. Despite this optimism, the stock trades above InvestingPro’s Fair Value estimate.

Sankar acknowledged risks including production challenges and rising competition from other quantum technologies. The company’s market capitalization stands at $7.26 billion.

The stock delivered a 225.17% return over the past year despite recent volatility. D-Wave is relocating its headquarters from Palo Alto to Boca Raton Innovation Campus in Florida by 2026, with Florida Atlantic University committing $20 million to purchase an Advantage2 system.

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