Why D-Wave Quantum Stock Keeps Going Up

Key Points

• D-Wave stock rose for a second straight day on Thursday.

• On Tuesday, the company announced a successful pilot project with the North Wales Police in Britain.

• 10 stocks we like better than D-Wave Quantum ›

Shares of quantum computing company D-Wave Quantum (NYSE: QBTS) soared 11.5% through 10:40 a.m. ET Thursday -- all on no obvious news today.

D-Wave Quantum did have some news earlier in the week. It may be one reason why the quantum stock has risen the past two days, despite investor uncertainty about the U.S. government shutdown.

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Image source: Getty Images.

D-Wave's big British news

D-Wave calls itself "a leader in the development and delivery of quantum computing systems, software, and services."

D-Wave announced its latest move to maintain its leadership Tuesday, "a joint proof-of technology project leveraging a hybrid-quantum application to optimize placement of police vehicles for emergency response" in the United Kingdom.

Utilizing quantum computers, D-Wave says it was able to deliver the North Wales Police "a faster, more accurate, and more efficient solution [helping] reduce the average incident response time by nearly 50%." D-Wave was able to tell the police where to place their cars to reach where they most likely would need to go, as fast as possible.

CEO Dr. Alan Baratz said the test proved quantum's "real-world potential across private and public sectors."

Is D-Wave Quantum stock a buy?

Unfortunately, the test did not prove -- or at least not yet -- that D-Wave can make money from this business. The company didn't say what, if any, revenue it got from the experiment.

While D-Wave does have some revenue coming in, its $9.5 billion market cap and $22.3 million in trailing-12-month sales mean this quantum stock costs a staggering 426 times annual sales -- with no profit to show for it.

If you ask me, D-Wave stock is moving purely on momentum at this point, and momentum can turn on a dime. Be careful about buying this one, until D-Wave proves it can earn some profits.

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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.