D-Wave Quantum Inc. () generally lags behind the average of other small/medium-sized pure play quantum industry players, as it records average lower returns and higher volatility (worse Sortino and Sharpe ratio).
The company’s momentum took a hit after the Q1 2026 results, but I believe that the current predominant “Sell” recommendation is too pessimistic, as some of the company’s bookings will crystalize in Q3 and Q4 2026 and the market is going to appreciate that added revenue more than EPS (as proven in the last and previous 10-Q reaction when the stock fell despite the company beating expected EPS, but dropping in revenue), even though that was to be expected.
In summary, I recommend a “HOLD” opinion on QBTS, while recognizing that the company will experience some shorter-term unpredictability.
Company Overview: Business Analysis & Technological Orientation
D-Wave Quantum Inc. (QBTS) focuses on quantum annealing, as opposed to gate-based computing (like ) or trapped-ion technology (like ), which targets combinatorial purposes, focusing on finding the most optimal solutions or outcomes among an enormous number of options that standard (bit-based computers) couldn’t process within a reasonable timeframe.
This approach is not meant for advanced simulation, such as modeling molecular composition of drugs, but finding optimal decisions (based on predefined perimeter set) that maximizes or minimizes those values, aiding in finding the most optimal values among an unfathomable number of possibilities – mirroring real-world scenarios, for example, logistics optimization, resource allocation, financial decisions, etc. Even though the commercial market possibilities for the tech that the company has already developed are huge, the turning point for QBTS remains elusive.
Hype Driven Sector
Thematic beta and temporal investor enthusiasm periods dominate over fundamentals and underlying cash flows. Quantum companies tend to move in a commensurate fashion in general, as presented below.
These price spikes tend to reflect sentiment and speculative interest in the quantum sector broadly, rather than any meaningful synergistic improvement in the underlying fundamentals. Although, this is to be expected in a pre-commercialization stage industry (like quantum right now), this specific sector has been dominated by retail money waves that have made it even more tempestuous in nature.
The latest hype was caused by Nvidia’s release of the “Ising” error-correction model on the 14th of April, when the whole industry reacted positively with QBTS rising 7.26% (O: 15.29, C: 16.97), despite the model providing essentially no operational benefits to QBTS. The model is designed for gate based quantum computing, not annealing which is QBTS’s domain.
While QBTS does have some limited exposure to gate—based quantum computing after the acquisition of Quantum Circuits, Inc. in January 2026, the company’s exposure to that doesn’t justify a 7.26% uptick with an even higher jump the next day, as it only exists on the balance sheet with no real operations or revenue coming from gate-based technologies which “Ising” is supposed to streamline by 2 processes: calibration and error-correction decoding.
Financials & Balance Sheet Data
QBTS Historical Performance: I used WisdomTree Quantum Computing Fund ETF () to compare the performance of peer companies and the whole computing sector as a whole. The fund was created in July 2025, so the data available is limited, but looking at the 31 overlapping weeks of OHLC prices of both, the following conclusions emerge:
QBTS records a lower average return, higher volatility, and significantly larger drawdown over the analyzed time period, which clearly identifies QBTS as underperforming compared to the whole industry by a widely worse Sharpe Ratio of 116 pp and an even worse Sortino Ratio (when downside volatility is just calculated as negative delta weekly) of 162 pp.
Valuation
Market Cap & Operating Size
Among pure play quantum companies, QBTS holds the second largest market cap ($8.19B) right after IONQ’s ($21.45B) and before ($6.41B), with the same holding true for Enterprise Value (EV) and the number of employees mirroring organizational size and capabilities. The revenue level (TTM: $12.4M ) barely places QBTS second, as IONQ records an industry record breaking $64.7M in Q1 2026 alone (TTM: $187.1M), and RGTI has a TTM revenue of $10M.
The recent 10-Q knocked out QBTS’s reputational momentum with the seemingly devastating 81% revenue drag, but the 2025 level of 24.6M was also a result of a one-time windfall for the company in the first place ($12.6M sale of a physical annealing quantum computer system).
Overlooked Revenue Streams
The stock seems more sensitive to revenue levels than EPS, as shown after Q1 2026 results – the stock fell ~8% as revenue fell 80.9% (which was predictable as it was inflated in the first place, as mentioned before) on May 12th, 2026, despite EPS beating the estimates by $0.05.
D-Wave managed to secure bookings that haven’t been priced into the stock yet. QBTS signed a $10M, two-year QCaaS agreement with an unnamed Fortune 100 company, alongside a $20M system sale to Florida Atlantic University (both announced Jan 27, 2026), which could boost QBTS’s commercialization potential in the longer term.
Moreover, based on the last Q1 2026 earnings call transcript, the company recorded ~ $42.4M in Remaining Performance Obligations, 54% of which is expected to be recognized within the next 12 months. That would raise the revenue from the current TTM of $12.4M to $35.3M, which would represent a significant advantage over RGTI and QUBT that haven’t reached that stage of commercialization yet. That could start to delineate both IONQ and QBTS from other mid-cap peers in the quantum race.
Risks
The entire pure quantum computing industry is subject to temporal price movements, such as the May 22nd price uptick for the entire industry, when QBTS jumped ~ 13% (along with other pure play quantum players) as a result of the US government approving a $2 billion financing initiative for quantum computing companies.
It is worth noting, however, that the more speculative the company in the quantum computing field, the more reactive it is to speculative winds and hype riding, for example while QBTS jumped 13%, RGTI went up by an even more astonishing almost 20%, while a more established IONQ gained only 9% despite it being in the most advanced commercialization stage among all of the above mentioned enterprises.
Cash Burn Rate & Operating Runway
The latest TTM Total Cash & ST investments of $588.4M and the operating cash burn rate of $97.7M gives QBTS a runway of approximately 6 years (without considering investing and financing cash flows). Based on that, the company has enough time to fulfill some of its revenue-generating projects, and some of them will materialize probably in Q3 and Q4 2026.
While I admit the company is at a disadvantaged position compared to the pure play quantum industry (based on historic Sharpe and Sortino ratios in relation to WQTM), the overwhelmingly pessimistic sentiment toward it is exaggerated at the moment.
Conclusion
For the following reasons, I believe that a predominant “Sell” consensus is too negative as of now, following the disappointing Q1 2026 report, and I recommend a mid-term “Hold”, while acknowledging that in the shorter term, the company might experience some more temporary volatility.
