Why D-Wave Quantum Stock Is Soaring Today

Key Points

• D-Wave Quantum has seen its stock price surge dramatically over the past year, fueled by a general excitement around the advanced technology.

• A Wall Street analyst increased their price target for D-Wave stock.

• While quantum computing holds long-term promise, investors should remember this is a technology in its very early days.

• 10 stocks we like better than D-Wave Quantum ›

Shares of D-Wave Quantum (NYSE: QBTS) are jumping on Wednesday, up 10.5% as of 2:50 p.m. ET. The rise comes as the S&P 500 and Nasdaq Composite gained 0.7% and 0.5%, respectively.

D-Wave, a company developing quantum computing technology, is riding momentum in the broader quantum market as its stock receives a price target upgrade from a Wall Street analyst.

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This analyst is bullish

An analyst at the investment bank B. Riley Financial increased their price target for shares of D-Wave while maintaining a buy rating. The analyst increased the target price from $20 to $22 and signaled their confidence in its potential.

This comes as the quantum industry sees an enormous amount of interest and momentum. D-Wave's stock is up nearly 1,700% in the last year alone.

Investors should be cautious

While there has been an increase in visibility for D-Wave in the last year, not enough has materially changed in my eyes to justify such an enormous run-up. The company's current market capitalization of over $6 billion stands in stark contrast to its 2024 revenue of less than $9 million.

Image source: Getty Images.

Despite the hype around quantum, I think there is plenty of reason to believe this technology is a very long way from maturing and being capable of driving revenue of any significance.

If you're an investor with a particularly high risk tolerance and the ability to possibly wait a decade for your investment to pay off, you could consider investing now. I'll personally wait until valuations come back to earth. If you do, however, I would strongly suggest spreading your investment around many quantum stocks; there's no way to tell at this point which company's approach will work in the long run.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.