Is D-Wave Quantum a Millionaire-Maker Stock?

What a time for tech investors. Quantum computing looks like a remarkable follow-up to artificial intelligence (AI). Researchers at McKinsey estimate that quantum computing could create up to $2.7 trillion in economic value for companies worldwide by 2040. Quantum computers could unlock new possibilities across applications, ranging from drug discovery to cybersecurity and AI.

D-Wave Quantum (NYSE: QBTS) is a promising quantum computing company. Its quantum annealing systems are already commercially available, and the acquisition of Quantum Circuits earlier this year gives it a pathway to gate-model systems. As a result, the company can pursue a broad range of commercial opportunities.

But is D-Wave Quantum stock actually a millionaire-maker? Investors may want to temper their expectations.

Image source: Getty Images.

The stock is way ahead of the business

Many millionaire-maker stocks start out really small. That's because it's usually much easier for a stock's market cap to grow from $500 million to $5 billion than it is to go from $50 billion to $500 billion. It's just difficult to grow large numbers for all but the most exceptional businesses. D-Wave Quantum's current market cap of $6.2 billion doesn't seem huge at first glance. That's until you look at the actual business, which is still in its infancy.

D-Wave Quantum has generated only $12.4 million in total revenue over the past year. Wall Street analysts estimate that revenue will grow to $42.8 million this year and $85.8 million next year. That's really strong growth, but from a tiny base. The stock is still very expensive, trading at approximately 72 times next year's revenue estimate. To realistically deliver life-changing investment returns from here, D-Wave Quantum probably needs to grow to a market cap of at least $100 billion.

Why that could be a very tall task

It's highly unlikely that D-Wave Quantum will have the opportunity to achieve that anytime soon. The quantum computing industry is overcrowded with other emerging pure-play companies and established tech firms, including International Business Machines, Microsoft, Amazon, Nvidia, and Alphabet, all developing quantum computers. McKinsey estimated that total industry revenue was $1 billion in 2025, so you can see just how insignificant D-Wave Quantum is at this moment.

It's still so early that investors have little way of knowing how D-Wave Quantum eventually fits into the competitive landscape. On top of that, it's hard to see D-Wave Quantum competing with the cloud giants in cloud-based quantum services. That potentially restricts the company's primary market opportunity to on-premise systems.

Lastly, none of this takes profitability into account. D-Wave Quantum has burned through $102.7 million in free cash flow over the past four quarters, resulting in a net loss of $368 million. Investors face share dilution as the company raises new capital to fund its operations over time. It's an understatement to call the stock risky. A risky stock can be a millionaire-maker when you buy at a cheap valuation. But D-Wave Quantum isn't that anymore.

Justin Pope has positions in Alphabet and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, International Business Machines, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.