Why D-Wave Quantum Stock Popped on Tuesday

D-Wave Quantum (NYSE: QBTS) stock was soaring Tuesday morning, up by 27.6% through 10:46 a.m. ET, after the company announced the "general availability" of its new Advantage2 quantum computer.

The company's sixth generation of its "annealing quantum computer," D-Wave says, "is production-ready" and delivers "significant performance gains over the previous D-Wave Advantage system."

Image source: Getty Images.

D-Wave's big news

Boasting more than 4,400 superconducting qubits, D-Wave says the Advantage2 can solve "computationally complex problems beyond the reach of classical computers," including "classical supercomputers."

D-Wave is making time and computational power on its new quantum computer available to clients through a cloud service that it says can be accessed from more than 40 countries. Additionally, D-Wave says it's ready to sell Advantage2 systems in their entirety for installation on-site to customers who want one of their own.

Is D-Wave Quantum stock a buy?

At least a few customers seem interested in taking D-Wave up on these offers. While its revenues are still small, the company reported $15 million in sales in Q1, more than 500% year-over-year growth. D-Wave is still losing money, but its $5.4 million in Q1 losses were down 70% from the $17.3 million it lost in the prior-year period.

That's the good news. The bad news is that despite all the improvements, no one on Wall Street is expecting D-Wave to turn profitable anytime soon. On a generally accepted accounting principles (GAAP) basis, it's expected to keep reporting losses past 2030, meaning D-Wave is still a pretty speculative stock. The upstart tech company might get acquired between now and then, or its products could experience an unforeseen surge in popularity that changes the business picture. Buying a stock based on such Hail Mary hopes, however, seems to me more speculation than investing.

While you're free to try it, of course, my advice would be to "buy small" and limit your risk.

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Rich Smith 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.