Dan Victor, The Motley Fool
5 min read
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Shares of D-Wave Quantum have skyrocketed amid strong sales momentum.
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The company is capitalizing on the demand for its rapidly advancing quantum computing technology.
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The stock's eye-watering valuation -- trading at over 130 times sales -- warrants caution.
Amid the wild swings on Wall Street this year, quantum computing remains one of the hottest stock market investing themes. D-Wave Quantum (NYSE: QBTS) has emerged as an industry leader, capturing strong demand for its cutting-edge technology with a growing number of commercial use cases. Accelerating sales have powered the stock to a staggering 705% return over the past year as of this writing, with optimism building among investors toward the company's outlook.
Can the rally keep going? Let's discuss where D-Wave Quantum stock might be in one year from now.
Quantum computers promise to solve complex problems in areas like optimization, cryptography, and simulations at speeds far surpassing classical computers. This potential stems from quantum mechanics where quantum bits, or qubits, can exist in multiple states simultaneously, enabling exponential computational processing. Recent advancements have moved these concepts from the realm of theory into real-world applications.
D-Wave Quantum distinguishes itself with its quantum annealing technology, which excels at solving optimization problems in fields like logistics, drug discovery, and financial modeling. The company published a paper demonstrating that its fifth-generation Advantage2 system solved a simulation in minutes that would take a classical supercomputer nearly 1 million years.
This demonstration underscores the company's edge in offering practical quantum solutions today. As quantum systems scale to harness more qubits with improved stability, they are expected to transform multiple industries.
D-Wave Quantum counts 133 current customers, including major diversified commercial organizations, research institutions, and government entities. The company offers access to its quantum computers through a flexible, cloud-based quantum computing as a service (QCaaS) platform, as well as an option for on-premise system installation. Additionally, D-Wave monetizes its Ocean software development toolkit, enabling customers to develop and deploy quantum applications.
The model is proving to be highly successful. In the first quarter (for the period ended March 31), revenue of $15 million soared by 509% year over year, primarily reflecting the delivery of an Advantage system. While D-Wave is not yet profitable, the sales momentum helped narrow the quarterly net loss to $5.4 million compared to $17.3 million in the prior-year quarter.
