QBTS Secures $819M Cash War Chest for Future R&D: Upside Ahead?

While D-Wave Quantum’s QBTS top line is advancing steadily, the real focus of investors is on its balance sheet. D-Wave closed the second quarter with a record $819 million in cash, up more than 1,900% from a year ago and 169% sequentially. More than $500 million was raised during the quarter, primarily from an at-the-market equity offering and warrant exercises, giving the company its strongest liquidity position ever.

D-Wave management emphasized that this capital will not only accelerate R&D, advancing systems like Advantage2 and the 100,000-qubit roadmap with NASA Jet Propulsion Laboratory (JPL) but also expand fabrication capacity, support global sales growth and provide flexibility for strategic acquisitions. In effect, the strengthened balance sheet positions D-Wave to scale both technologically and commercially, while also pursuing inorganic growth opportunities.

On the innovation front, D-Wave advanced its Advantage2 quantum computer with higher connectivity, coherence and energy scale, enabling the first real-world quantum supremacy demo in materials simulation. It also expanded into quantum AI with a PyTorch toolkit, already adopted by Japan Tobacco and Triumph.

Commercial traction continues to grow, with new contracts and renewals from E.ON, GE Vernova, Nikon, NTT Data, NTT DOCOMO and Sharp, alongside partnerships with Oxford, UK’s National Quantum Computing Centre and a new South Korea MOU with Yonsei University and Incheon City.

Competitors Too Creating War Chest

IonQ IONQ  is optimistic about strategic acquisitions, including Oxford Ionics, Lightsynq and Capella, which are expected to strengthen its roadmap. Despite the company incurring a net loss from higher expenses, a $1 billion equity raise boosted cash, giving IonQ the resources to accelerate R&D, expand and push into quantum networking and sensing.

Rigetti Computing RGTI, on the technology front, hit a key milestone by unveiling the industry’s largest multi-chip quantum computer and achieving 99.5% two-qubit gate fidelity, paving the way for a 100+ qubit system by 2025-end. A $350 million at-the-market equity raise in the second quarter lifted liquidity to $571.6 million with no debt, providing a solid base for continued development and strategic moves.

In August so far, shares of D-Wave have underperformed Rigetti and IonQ.

Month-to-Date QBTS Share Comparison

Average Target Price for QBTS Suggests Near-Term Upside

Based on short-term price targets offered by 10 analysts, D-Wave Quantum’s average price target represents an increase of 24.6% from the last closing price of $17.01.

D-Wave Quantum currently carries a Zacks Rank #3 (Hold). 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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