TD Cowen kicked off coverage on D-Wave Quantum (QBTS) with a Buy rating Thursday. Analyst Krish Sankar emphasized the company’s revenue generation as a key differentiator in quantum computing.
Most quantum companies remain stuck in research and development. D-Wave already sells hardware and cloud services to paying customers.
The company’s technology handles real-world tasks like scheduling and logistics optimization. Sankar expects broader enterprise adoption as quantum tools prove their value.
TD Cowen forecasts D-Wave will post $26 million in 2025 revenue. That number should surge to $135 million by 2028, representing more than 70% annual growth.
The business model centers on high-margin enterprise sales. Each Advantage quantum system fetches between $20 million and $40 million.
Cloud services through the Leap platform add recurring revenue. Businesses access quantum computing power without capital equipment purchases.
D-Wave reported 156.2% revenue growth over the past year. Gross margins hit 82.82% as the company scales operations.
Usage metrics show strong momentum. Advantage2 annealing quantum computer usage jumped 314% year-over-year. The Stride hybrid solver saw 114% usage growth in six months.
D-Wave’s purchase of Quantum Circuit Inc. technology could accelerate product development. The QCI DRQ technology delivers fidelity rates exceeding 99.9%.
Higher fidelity opens doors to new applications. Sankar said the acquisition positions D-Wave for AI and machine-learning workloads later this decade.
The move expands the company’s total addressable market. More problem types become solvable as technical capabilities improve.
D-Wave maintains a fortress balance sheet. The company holds more cash than debt with a 54.68 current ratio.
The debt-to-equity ratio stands at just 0.06. Financial flexibility enables acquisitions and faster product rollouts.
D-Wave recently landed a $10 million, two-year contract with a Fortune 100 company. The Quantum Computing as a Service deal involves developing multiple quantum applications.
The company plans to relocate headquarters from Palo Alto to Florida’s Boca Raton Innovation Campus by 2026. Florida Atlantic University committed $20 million to purchase an Advantage2 system for its nearby campus.
Sankar, ranked 10th among 12,108 analysts on TipRanks, maintains a 66% success rate with 41.90% average returns. He cautioned that production challenges and competitive threats remain risks.
All 12 Wall Street analysts covering D-Wave rate the stock a Strong Buy. The $41.25 consensus price target suggests 110% upside potential from current levels, though shares trade above InvestingPro’s Fair Value estimate with a $7.26 billion market cap.
The post D-Wave Quantum (QBTS) Stock Could Double as Analysts See 110% Upside Ahead appeared first on Blockonomi.
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