QBTS Tops IONQ, RGTI in 1H25 But Valuation Stretched: Buy Now or Wait?

D-Wave Quantum’s QBTS first half of 2025 was marked by scientific validation, commercial traction and steady progress toward financial stability. The company delivered a strong first quarter, driven by a landmark system sale to the Jülich Supercomputing Center and the achievement of quantum supremacy on a real-world materials problem. While the second quarter normalized to service-driven revenues, the momentum carried forward through new customer wins across energy, defense, academia and law enforcement, along with the general availability launch of the Advantage2 processor. With more than 1,300 applications now tested through its Leap LaunchPad and a growing base of enterprise deployments, QBTS is proving that quantum annealing is already translating into practical business outcomes.

Looking ahead, the roadmap is becoming clear as D-Wave advances in terms of scalability. From its collaboration with NASA JPL on cryogenic packaging to pave the way toward 100,000-qubit systems, to its integration of quantum AI with PyTorch, the company is steadily expanding in terms of both infrastructure and developer ecosystems.

The combination of scientific breakthroughs, expanding real-world adoption and a solid cash balance of more than $300 million provides investors with a compelling entry point. As the quantum sector matures, QBTS now stands out as a stock worth closer attention.

QBTS Outperforms Industry, Sector, Benchmark and Peers in 1H25

During the first half of 2025, QBTS shares rallied 74.2%, strongly outperforming the subindustry, sector and the S&P 500 index. The company also outperformed its archrivals IonQ IONQ and Rigetti Computing RGTI during this period. IONQ stock rose 2.8% while Rigetti shares lost 22.3% in the first half of 2025.

QBTS Quantum Roadmap in Detail

D-Wave’s quantum roadmap is focused on continuously improving its annealing technology while also preparing for hybrid quantum-classical systems and eventually gate-model systems, with progress already visible in the first half of 2025. The company officially launched the Advantage2 processor into general availability in the second quarter, a system with more than 4,400 qubits representing a meaningful step-up in performance compared to prior generations. Alongside this, D-Wave rolled out a quantum artificial intelligence toolkit that integrates directly with PyTorch, one of the most widely used machine learning frameworks, and showcased how this can be applied through demonstrations such as quantum-enhanced image generation.

D-Wave also advanced its long-term scaling strategy by announcing a collaboration with NASA’s Jet Propulsion Laboratory to develop advanced cryogenic packaging that will allow multichip integration and support the path toward processors with 100,000 qubits, which would unlock the ability to tackle much larger and more complex problems.

On the adoption side, the Leap LaunchPad program has already supported testing of more than 1,300 applications since January 2025, showing strong developer engagement, with customers in industries such as energy, defense, law enforcement and life sciences beginning to apply D-Wave’s systems to real-world optimization and AI challenges.

QBTS Gaining Financial Stability

From a financial perspective, D-Wave’s first half of 2025 reflects early signs of stabilization. First-quarter revenues spiked to a record $15 million on the back of a one-time Advantage2 system sale to Jülich, while second-quarter revenues normalized to $3.1 million, still up 42% year over year, supported by service and upgrade revenues.

Adjusted gross margin remained strong at 93.6% in the first quarter and 71.8% in the second quarter, underscoring the profitability potential of high-value system sales and software services. Operating efficiency also improved, with first-half adjusted EBITDA loss narrowing to $26.1 million from $26.8 million a year earlier, with the improvement due to higher gross profit, partially offset by increased operating expenses.

Importantly, balance sheet strength remains a differentiator. The company ended the second quarter with more than $300 million in cash, bolstered by a $146 million equity raise earlier in the year, providing a multi-year liquidity runway at current burn levels. Taken together, while quarterly revenues will likely remain lumpy, D-Wave’s combination of high-margin system opportunities, growing recurring service revenues and fortified cash reserves provides strong financial resilience needed for its long-term strategy.

FY25 Estimates for QBTS

The Zacks Consensus Estimate for D-Wave Quantum’s 2025 earnings and revenues implies 68% and 181.5% improvement, respectively, from 2024.

QBTS Stock Trading at a Premium

D-WAVE QUANTUM shares are currently overvalued, as suggested by its Value Score of F. 

In terms of the forward 12-month price/sales (P/S), QBTS is trading at 153.44X, significantly higher than its one-year median of 96.31X and the Zacks Computer and Technology sector’s 6.73X.

Price/Sales Ratio (Forward 12 Months)

Final Take

Despite the strong momentum in technology milestones and a fortified balance sheet, D-Wave remains a Zacks Rank #3 (Hold) stock due to its stretched valuation, persistent operating losses and the capital-intensive nature of its technology roadmap. QBTS has already priced in much of its near-term optimism, with shares up more than 70% in the first half of 2025 and trading at a forward P/S multiple well above both its historical median and the sector average. These factors make the near-term risk/reward profile less attractive despite the stock’s long-term potential. 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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