Why D-Wave Stock Jumped Today

Key Points

• D-Wave's shares surged on artificial intelligence (AI) integration news, but fundamentals haven’t caught up.

• Investors should be wary of quantum hype outpacing reality.

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

Shares of D-Wave Quantum (NYSE: QBTS) spiked on Tuesday, finishing the day up 6.8%, but had jumped as much as 11.6% earlier in the day. The rise came as the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) lost 0.5% and 0.7%, respectively.

D-Wave, a company developing quantum computing technology, announced the launch of a suite of new artificial intelligence (AI)-focused development tools.

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D-Wave says it's bringing quantum and AI together

The company announced yesterday that it was releasing "a collection of offerings to help developers explore and advance quantum artificial intelligence (AI) and machine learning (ML) innovation." Included in the release is an open source toolkit and a demo that enable "developers to seamlessly integrate quantum computers into modern ML architectures."

The company is clearly hoping to tap into the incredible growth of ML and AI, positioning its quantum technology as a powerful tool to maximize AI's potential.

Image source: Getty Images.

Quantum investors are getting ahead of themselves

The company's current market capitalization of more than $5.7 billion stands in stark contrast to its 2024 revenue of less than $9 million.

Despite the hype around quantum computing, 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. D-Wave delivers its computing services to customers using a mix of quantum and classical computing, but is conveniently light on the details of how much it relies on each.

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.