D-Wave Quantum Inc. (NYSE: QBTS) has experienced a significant surge in its stock price (over 40% just today), currently trading at $9.75, with a market capitalisation of approximately $3.02 billion. This sharp increase is driven by a combination of positive earnings results, improved guidance for 2025, and growing investor optimism about the company’s technological advancements. In this article, we’ll explore the key reasons behind D-Wave’s impressive performance, examine their financial results, and provide realistic price targets for the coming years.
Luckily for those that are into quantum computing stocks, this wasn’t the only one rising today and we saw good returns in other stocks such as Rigetti Computing, IonQ or Quantum Computing Inc.
D-Wave’s Q4 2024 Earnings and Full-Year Results: Key Highlights
D-Wave’s recently announced fourth-quarter and full-year 2024 earnings showcased some critical achievements and forward-looking guidance that have boosted investor confidence in the industry again and all of this just before the Quantum Day Conference planned for next week where we expect exciting news. But before that lets look at the earnings from D-Wave. You can read them in full on their investor relations site.
Fiscal Year 2024 Financial Highlights:
- Revenue: $8.8 million, flat compared to 2023’s $8.8 million.
- Bookings: $23.9 million, marking a 128% increase from $10.5 million in 2023.
- Customer Growth:
- Total customers increased to 135 (up from 133).
- Commercial customers slightly decreased to 76 (from 78).
- Research and government customers increased to 59 (from 55).
- Forbes Global 2000 customer count increased to 28 (from 27), now constituting 37% of total commercial customers.
So as you can see, they are better and some improvement, however the attention was on their estimates for the following quarter.
Outlook for Q1 Fiscal Year 2025: A Positive Signal
D-Wave has provided an optimistic outlook for the first quarter of fiscal 2025. The company expects revenue to exceed $10 million, significantly boosted by revenue recognition from the sale of an Advantage annealing quantum computer. This projected increase represents a substantial jump in quarterly revenue, 4 times the previous quarter, signalling accelerating business momentum.
Why is D-Wave Stock Surging?
Several factors have contributed to D-Wave’s recent stock rally:
- Revenue Growth Potential: The company’s guidance for Q1 2025 indicates a strong upward trajectory in revenue, surpassing the entire 2024 figure in just one quarter.
- Increased Bookings: A 128% rise in bookings signals strong demand for D-Wave’s quantum computing solutions.
- Expanding Customer Base: The steady increase in total customers, particularly among Forbes Global 2000 companies, highlights the growing commercialisation of their quantum technology.
- Technological Advancements: D-Wave’s focus on annealing quantum computing positions it as a leader in niche quantum solutions for optimisation problems, offering a competitive edge.
Analyst Sentiment and Price Targets
Analysts have shown increasing optimism toward D-Wave following its strong earnings and improved outlook. Updated price targets reflect this bullish sentiment:
- Average Price Target: $12.50
- High Estimate: $15.00
- Low Estimate: $8.00
Given the company’s improved revenue outlook and expanding market presence, these targets suggest considerable upside potential.
D-Wave Stock Price Forecast: Projections Based on Industry Growth Rates
That is what analyst are projection for D-Wave in the next 12 months however we want to play a little bit more and try to make a price prediction for D-Wave Stock on the following 5 years, so wondering where D-Wave stock could be in 2030.
To estimate D-Wave’s potential future stock price, we can project revenue growth using the expected compound annual growth rate (CAGR) of the quantum computing industry. According to Market.us, the global quantum computing market is anticipated to grow at a CAGR of 31.2% from 2023 to 2032.
Applying this growth rate to D-Wave’s projected revenues provides insights into the company’s potential valuation over the next several years, so let’s play.
Forecasted Revenue Growth and Stock Price Projections:
- 2025 Revenue Estimate: $40 million (based on Q1 guidance of $10 million, annualized)
- 2026 Revenue Estimate: $52.5 million
- 2027 Revenue Estimate: $68.9 million
- 2028 Revenue Estimate: $90.4 million
- 2029 Revenue Estimate: $118.6 million
- 2030 Revenue Estimate: $155.5 million
Assuming D-Wave maintains a Price-to-Sales (P/S) ratio of 50, which is typical for high-growth tech stocks in emerging industries:
- 2025 Stock Price Estimate: ~$20.00
- 2026 Stock Price Estimate: ~$26.25
- 2027 Stock Price Estimate: ~$34.45
- 2028 Stock Price Estimate: ~$45.20
- 2029 Stock Price Estimate: ~$59.30
- 2030 Stock Price Estimate: ~$77.75
These projections suggest that, if D-Wave aligns with the industry’s growth trajectory, its stock price could experience substantial appreciation over the next five to six years. However, it’s important to note that these estimates are based on industry averages and assume D-Wave’s performance will mirror overall market growth. Actual results may vary based on the company’s execution, technological advancements, competitive landscape, and broader economic factors. Hopefully as investors, they can beat the market growth.
Key Considerations:
- Market Adoption: The pace at which industries adopt quantum computing solutions will significantly influence D-Wave’s growth.
- Technological Development: Continued innovation and the successful deployment of new quantum computing systems, such as the Advantage2, will be crucial.
- Competition: The emergence of new competitors and advancements by existing ones could impact D-Wave’s market share.
Investors should approach these projections with caution, considering the inherent uncertainties in the rapidly evolving quantum computing industry.
Is D-Wave Stock a Buy?
D-Wave Quantum presents an intriguing investment opportunity for those bullish on quantum computing’s long-term potential. The company’s rapid growth in bookings, expanding customer base, and strong Q1 2025 guidance signal accelerating commercial momentum. While the stock has experienced volatility, D-Wave’s unique technology and improving financials provide a compelling case for growth-oriented investors, specially if we are talking about long term (5+ years).
Key Risks to Consider:
- Quantum computing remains a nascent industry, and widespread adoption is still years away, Nvidia’s CEO said around 10 years away.
- D-Wave’s cash burn rate may require additional funding rounds, potentially diluting shareholders.
- Competition from major tech giants in the quantum space could challenge D-Wave’s market position.
Final Thoughts
D-Wave Quantum’s recent surge reflects growing investor excitement about its promising future. With a strong Q1 outlook, expanding bookings, and increasing commercial adoption, D-Wave has positioned itself as a leader in the evolving quantum computing landscape. While the stock carries inherent risks, its growth potential could offer significant returns for patient investors willing to embrace the volatility of this emerging industry. So are you willing to wait? Don’t miss the other Top 10 Quantum Computing Stocks that we selected.
