D-WAVE QUANTUM QBTS shares have surged 62% since the company reported fourth-quarter 2024 results on March 13. The outperformance can be attributed to strong growth in bookings, which surged 502% on a year-over-year basis to $18.3 million. 

This indicates strong customer interest and growing demand for its quantum computing systems.

QBTS’ has been benefiting from an expanding clientele and growing influence in the quantum computing space. QBTS shares have surged 35.8% in the year-to-date period against the broader Zacks Computer and Technology sector’s decline of 7.9% and the Internet - Software industry’s decline of 2.3%.

QBTS Outperforms Sector, Industry

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Can D-Wave Quantum’s strong bookings growth and expanding clientele sustain its impressive stock performance in the long term?

QBTS Benefits From Expanding Quantum Computing Market

QBTS’ expanding portfolio in the quantum computing space has been a key catalyst. In the fourth quarter of 2024, D-Wave launched on-premises systems offering for quantum experimentation, and the Julich Supercomputing Centre became the first High-Performance Computing center to acquire a D-Wave Advantage annealing quantum computer, set to integrate with Europe’s exascale JUPITER supercomputer.

In the reported quarter, QBTS also announced the calibration of its third 4,400-qubit Advantage2 processor, featuring doubled qubit coherence time for faster time to solution, a 40% increase in energy scale for higher-quality outcomes, and enhanced qubit connectivity from 15-way to 20-way, enabling the resolution of larger and more complex problems.

As the quantum computing market continues to evolve, QBTS is poised to benefit from its growth. Per a Grand View Research report, the global quantum computing market was valued at approximately USD 1.42 billion in 2024 and is projected to expand at a compound annual growth rate of 20.5% from 2025 to 2030.

QBTS’ Strong Partner Base Aids Prospects

QBTS’ partnerships with Carahsoft, Zapata Computing Holdings, Japan Tobacco, North Wales Police, Unipol and Staque have been major growth drivers for its success.

In January, QBTS partnered with Carahsoft Technology to bring quantum computing technologies to the Public Sector. This collaboration enables government agencies and national labs to access D-Wave’s quantum solutions via Carahsoft’s extensive reseller network and procurement contracts.

In the fourth quarter of 2024, D-Wave broadened and diversified its customer base, which now includes 135 customers across commercial, government, and research sectors. This includes 59 research and government clients, as well as 76 commercial customers, of which 28 are Forbes Global 2000 companies, accounting for 37% of the commercial segment.

Earnings Estimates for QBTS Show Upward Trend

D-WAVE’s expanding portfolio in the quantum computing space and expanding customer base are expected to benefit the company’s top-line growth.

The Zacks Consensus Estimate for 2025 revenues is currently pegged at $15.42 million, indicating an increase of 76.23% year over year. 

The consensus mark for loss is currently pegged at 38 cents per share, unchanged over the past 30 days. QBTS incurred a loss of 41 cents per share in the year-ago quarter.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

QBTS Faces Growing Pressure From Rising Quantum Competitors

Despite expanding its portfolio and customer base, QBTS faces significant challenges from macroeconomic uncertainties and fierce competition in the rapidly evolving quantum computing market. 

Competitors like Rigetti Computing RGTI, along with major players such as International Business Machines IBM, Alphabet GOOGL and IonQ, are intensifying market pressures with its advancements in quantum computing technologies, potentially impacting QBTS’ financial performance.

In February 2025, Rigetti Computing announced a strategic collaboration with Quanta Computer to accelerate superconducting quantum computing development, with both companies committing over $100 million each over five years. This move by Rigetti Computing further solidifies its position in the market, directly increasing competition for QBTS, as it demonstrates a strong financial commitment to staying ahead in the quantum race.

In late 2024, IBM launched its most advanced quantum computers, while Google’s Willow quantum chip demonstrated exceptional computational efficiency, solving tasks in minutes that would take supercomputers a much longer time.

This shift in market dynamics is further highlighted by Meta Platforms CEO Mark Zuckerberg’s skepticism. During a Joe Rogan podcast, Zuckerberg expressed doubts about the near-term utility of quantum computing. His viewpoint aligns with NVIDIA CEO Jensen Huang’s assertion that practical quantum computers are decades away.

QBTS Stock is Overvalued

QBTS stock is not so cheap, as suggested by the Value Score of F. 

In terms of the forward 12-month Price/Sales, QBTS is trading at 158.54X, significantly higher than the sector’s 5.81X.

Price/Sales F12M

Image Source: Zacks Investment Research

Conclusion

Stretched valuation, along with stiff competition, is expected to drag down QBTS shares in the near term.

QBTS currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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