QBTS's 332% Surge Highlights Speculative Frenzy Amidst Unproven Revenue Sustainability

What happened

D-Wave Quantum's stock has soared 332% over the past year, as highlighted in a recent Zacks article celebrating its shift from research to revenue and triple-digit growth in 2025. However, this growth is primarily driven by irregular, high-value Advantage2 system sales and professional services, rather than recurring quantum computing as a service (QCaaS) subscriptions, which remain modest. Critical SEC filings reveal that Q3 2025 bookings grew only 3% year-over-year to $2.4 million, indicating weak underlying demand beyond a few lumpy deals. At a market cap of approximately $10.5 billion on forward revenue of $25-30 million, the valuation embeds expectations for sustained hyper-growth and successful gate-model commercialization that current fundamentals do not substantiate. Moreover, heavy dilution from equity raises and the pending Quantum Circuits acquisition pressures per-share value, making the stock vulnerable to multiple compression if growth slows or technology milestones slip.

Implication

The stock's parabolic rise reflects market euphoria over quantum computing, but it masks the fragility of D-Wave's revenue model, which depends on sporadic system sales rather than sustainable QCaaS growth. Without a significant increase in recurring bookings or consistent demand, the current triple-digit revenue expansion is likely unsustainable, risking a sharp re-rating toward more modest growth assumptions. Heavy dilution from ATMs and acquisitions means per-share value creation requires near-flawless execution, including timely gate-model launches and paying pilots, which are highly uncertain given historical slippage and competitive pressures. Any slowdown in bookings, delay in the gate-model roadmap, or sentiment reversal could trigger significant downside, as evidenced by the bear scenario implying a value of $15, well below current levels. Therefore, investors should avoid new exposure at current prices and monitor for concrete evidence of recurring demand and milestone achievements before considering entry, aligning with the DeepValue report's 'POTENTIAL SELL' rating.

Thesis delta

The Zacks article promotes QBTS's revenue growth and stock surge as indicators of continued success in 2026, but a critical analysis of SEC filings reveals this optimism is overstated. The fundamental thesis remains unchanged: QBTS is overvalued due to reliance on lumpy deals, unproven gate-model commercialization, and heavy dilution, with a high risk of correction if execution falters or sector sentiment cools. Investors should not be swayed by superficial metrics and instead focus on sustainable bookings growth and tangible technology progress to assess any shift in investment merit.