While the stock market seems enraptured with artificial intelligence (AI) and semiconductors, the next great thing is just around the corner. Quantum computing provides a significant leap forward in processing power, and there are several companies lining up to bring it to fruition.<\/p>\n
Quantum computing is different from classical computing because it uses quantum bits, or qubits, that exist simultaneously in multiple states and can handle complex calculations much faster\u2014as traditional computers solve problems step by step, quantum computers can do many things at once.<\/p>\n
D-Wave Quantum (QBTS) is one such company that is working in this space, and it’s been in the news lately as the company announced it would streamline its capital structure while redeeming 5 million warrants in a capital raise.<\/p>\n
If all the warrants are exercised by the Nov. 17 deadline, D-Wave will issue 7.2 million shares of stock, representing 2.1% dilution to existing shareholders.<\/p>\n
D-Wave Quantum stock dropped 6% following the announcement, although QBTS stock has been a winner for the last year. Is this an opportunity to buy on sudden weakness?<\/p>\n
Based in Palo Alto, California, D-Wave Quantum provides quantum computing systems, software, and services. The company describes itself as the world\u2019s first commercial supplier of quantum computers and says it\u2019s the only one building annealing and gate-model quantum computers. It has a market capitalization of $11 billion.<\/p>\n
The company in May unveiled its sixth-generation quantum computer, the Advantage2, for real-world use cases. D-Wave Quantum says the system, which is available both on the company\u2019s cloud and on-premise, has 20-way qubit connectivity and a 40% increase in energy scale.<\/p>\n
QBTS stock is up a whopping 2,220% in the last year, by far outstripping the Russell 2000\u2019s return of 12.6% in the same period. It slightly trails competitor Rigetti Computing\u2019s (RGTI) 2,780% return over the last 12 months but by far outpaces IonQ (IONQ), which is up a comparatively weak 261%.<\/p>\n
www.barchart.com <\/p>\n
And as expected, when a stock rips off a 20x-plus gain in 12 months, the valuation is out of whack. D-Wave Quantum\u2019s current forward price-to-sales (P\/S) ratio of 448 is much higher than its three-year mean of 24.6\u2014there’s a lot of speculative optimism baked into QBTS stock right now.<\/p>\n
Story Continues <\/p>\n
D-Wave Quantum\u2019s second-quarter earnings report was a disaster, but when you look closer, there\u2019s a reason for the miss. Analysts expected a loss of $0.06 per share, but the company posted a loss of $0.55 per share\u2014the net loss for the quarter was $167.3 million, up from a loss of $17.8 million the previous year.<\/p>\n
D-Wave Quantum attributed the loss to $142 million in accounting charges tied to the company\u2019s warrants. Essentially, the rise in stock price made the company\u2019s loss look much worse on paper.<\/p>\n
The adjusted net loss was much better, coming in at $0.08 per share and $25.3 million. Revenue was $3.1 million, up from $2.2 million in the same quarter a year ago, and the company posted bookings of $1.3 million, up 92% from the previous year. D-Wave Quantum announced it achieved more than 100 revenue-generating customers, a milestone.<\/p>\n
The company did not issue guidance, but management disclosed during its call with analysts that it expects a 15% increase in quarterly non-GAAP operating expenses as it seeks merger opportunities and anticipates announcing acquisitions later in the year.<\/p>\n
Eleven analysts currently cover QBTS stock, and while the sentiment is strongly bullish, it\u2019s slipped slightly in the last month. Nine analysts consider it a \u201cStrong Buy,\u201d and one calls D-Wave Quantum a \u201cModerate Buy.\u201d But the final analyst gave the stock a \u201cStrong Sell\u201d rating, which is a change from the previous month when the final analyst recommended holding.<\/p>\n
The mean price target for QBTS stock is $26.30, which represents a 4.6% decrease from the stock\u2019s current price. But that\u2019s to be expected considering how quickly the stock has jumped in the last few months. The high target of $50 per share indicates a potential 81% gain, while the most bearish price target is only $20\u2014potentially a 28% reduction in stock price.<\/p>\n
www.barchart.com <\/p>\n
On the date of publication, Patrick Sanders did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally\u00a0published on Barchart.com<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"While the stock market seems enraptured with artificial intelligence (AI) and semiconductors, the next great thing is just…\n","protected":false},"author":3,"featured_media":176000,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[3554,492,918,159,67,132,68],"class_list":{"0":"post-325055","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-physics","8":"tag-classical-computing","9":"tag-physics","10":"tag-quantum-computing","11":"tag-science","12":"tag-united-states","13":"tag-unitedstates","14":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115420461109523329","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/325055","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=325055"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/325055\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/176000"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=325055"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=325055"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=325055"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}