Should You Add QBTS Stock to Your Portfolio Ahead of Q1 Earnings?

D-WAVE QUANTUM QBTS is set to report first-quarter 2025 results on Thursday.

The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $10.87 million, indicating an increase of 339.92% year over year. 

The consensus mark for loss is currently pegged at 5 cents per share, unchanged over the past 30 days. QBTS reported a loss of 11 cents per share in the year-ago quarter.

QBTS earnings missed the Zacks Consensus Estimate in three of the trailing four quarters and matched once, the negative average earnings surprise being 89.65%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar).

D-Wave Quantum Inc. Stock Price and EPS Surprise

D-Wave Quantum Inc. price-eps-surprise | D-Wave Quantum Inc. Quote

Let’s see how things have shaped up prior to this announcement.

Key Factors to Note for QBTS Q1 Earnings

QBTS expects revenues to exceed $10 million in the first quarter of 2025. A significant portion of this revenue is expected to have benefited from the sale of an Advantage annealing quantum computer to Julich Supercomputing Center.

D-Wave Quantum is expected to have benefited from the strength of its quantum computing solutions. Accelerating the adoption of quantum among commercial customers is expected to bode well for its first-quarter 2025 results.

The company reported a 128% increase in bookings for fiscal 2024, and continued expansion in commercial, government, and research sectors, which is expected to have further driven growth in the to-be-reported quarter.

D-Wave Quantum’s customer base now includes 135 customers across commercial, government, and research sectors. This includes 59 research and government clients, as well as 76 commercial customers, of which 28 are Forbes Global 2000 companies, accounting for 37% of the commercial segment. This growing customer base is likely to have benefited the company’s top line in the to-be-reported quarter. 

The company is also seeing increased demand for its quantum computing services. D-Wave Quantum continues to work with customers on developing quantum and hybrid quantum applications, which are expected to have driven growth in QCaaS revenues in the to-be-reported quarter. 

QBTS Shares Underperformed Industry, Sector

QBTS shares have lost 16.4% in the year-to-date period compared with the broader Zacks Computer and Technology sector’s decline of 8% and Internet - Software industry’s decrease of 0.1%. The underperformance can be attributed to increasing macroeconomic challenges and U.S. President Donald Trump’s decision to impose tariffs on top trading partners, including China, Mexico and Canada, which has increased the chances of a trade war.

YTD QBTS Stock Performance

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 77.85X, significantly higher than its median of 14.19X and the Zacks Computer and Technology sector’s 5.76X.

Price/Sales Ratio (Forward 12 Months)

QBTS Faces Growing Pressure From Rising Quantum Competitors

QBTS is facing fierce competition in the rapidly evolving quantum computing market.  Competitors like Rigetti Computing RGTI, along with major players such as IBM, Alphabet GOOGL and IonQ IONQ, are intensifying market pressures with their advancements in quantum computing technologies, potentially impacting QBTS’ financial performance.

In February 2025, Rigetti Computing announced its collaboration with Quanta Computer to accelerate superconducting quantum computing development, with both companies committing over $100 million each over five years. This move by Rigetti Computing further solidifies its position in the market, directly increasing competition for QBTS.

Alphabet’s Google Willow quantum chip demonstrated exceptional computational efficiency, solving tasks in minutes that would take supercomputers a much longer time. This highlights Alphabet’s growing dominance in the quantum space.

IONQ recently announced advancements in quantum computing for AI, with IONQ demonstrating hybrid quantum-classical approaches to enhance large language models and generative AI in material science.

The shift in market dynamics is further highlighted by Meta Platforms CEO Mark Zuckerberg’s skepticism. During a Joe Rogan podcast, Zuckerberg expressed doubts about the near-term utility of quantum computing. His viewpoint aligns with NVIDIA CEO Jensen Huang’s assertion that practical quantum computers are decades away.

What Should Investors Do With QBTS Stock?

Despite macroeconomic uncertainties and stiff competition, QBTS’ expanding clientele and growing influence in the quantum computing space are expected to benefit D-Wave Quantum’s topline. These factors justify the company’s premium valuation. 

As the quantum computing market continues to evolve, QBTS is poised to benefit from its growth. Per a Grand View Research report, the global quantum computing market was valued at approximately USD 1.42 billion in 2024 and is projected to expand at a compound annual growth rate of 20.5% from 2025 to 2030. This bodes well for D-Wave Quantum’s prospects.

QBTS currently has a Zacks Rank #2 (Buy). 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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