Bull vs. Bear: D-Wave Quantum

Continuing my "Bull vs. Bear" series of articles examining the bullish and bearish arguments for some popular stocks, I come to D-Wave Quantum (NYSE: QBTS). D-Wave has been a volatile stock, up nearly 150% over the past year but down around 30% year to date, as of this writing. Meanwhile, the stock has drawn about a 16% short interest from investors.

Let's delve into the bullish and bearish cases for the quantum computing stock.

Image source: The Motley Fool.

The bull case for D-Wave Quantum

D-Wave Quantum is unique among quantum computing stocks in that the company is currently pursuing two different paths with the technology. It has established itself as a leader in quantum annealing, which is a simpler and more specialized quantum technology. Instead of trying to solve the world's great problems, quantum annealing looks to solve optimization problems by finding the ideal state for a particular problem and settling on the best possible solution.

It can be particularly useful in industries like finance, logistics, and defense, where finding the most efficient solution among millions of variables can provide a significant competitive advantage or help reduce costs. For example, quantum annealing can be used by a logistics company to find the best delivery routes or by a portfolio manager to help manage portfolio risk. Because it's a simpler technology, it's much further along in the commercialization process than more traditional quantum systems. D-Wave is already starting to sell its Advantage II system, and it announced in February that its $30 million bookings in January were already more than it had for all of 2025. It also signed a two-year enterprise Quantum Computing as a Service (QCaaS) agreement with a Fortune 100 company. Clearly, the company is seeing some solid momentum with its annealing solution.

At the same time, D-Wave has begun pursuing the more traditional gate-based approach to quantum computing. It will use fluxonium qubits for its gate-based systems, which it says are similar to the qubits it uses for its annealing technology. Fluxonium qubits have longer coherence, which means they can stay in a quantum state longer before being impacted by errors.

It also acquired Quantum Circuits, which was founded by a Yale professor who was behind the superconducting circuit architecture used by most quantum computing companies today. The company brings with it a dual-rail gate-model processor that has built-in error detection. It thinks that by combining technologies, it can create a system with the speed of superconducting qubits with the superior accuracy of trapped-ion technology.

The bear case for D-Wave Quantum

While D-Wave has taken the lead in quantum annealing, it is not the traditional quantum systems that get people excited. It's more of a niche technology and one that may not offer much more of an advantage than artificial intelligence (AI).

Meanwhile, while the company's move into traditional gate-based systems is exciting, the company hasn't yet published any milestone data, so the talk of creating systems with the fidelity of trapped-ion technology used by IonQ and the speed of more traditional superconducting systems is just talk at that point.

With a $7 billion market cap and less than $25 million in sales in 2025, this is still a stock trading largely on hopes and dreams that may not come to fruition. Notably, Quantum Circuits was acquired for only $550 million, so if its technology really is that good, why did it sell itself for so little when public quantum computing stocks have multibillion-dollar valuations?

The verdict

I'm not convinced D-Wave's quantum annealing technology is so much better at optimization than AI, making this likely a small niche market and not justifying D-Wave's current valuation. That puts the emphasis on its gate-based endeavors, which currently lack peer-reviewed data. As such, I'd stay away from the stock.

You can find past "bull vs. bear" articles on Apple, Meta Platforms, Palantir Technologies, Micron Technology, Tesla, and Nvidia by following the links.

Geoffrey Seiler has positions in Advanced Micro Devices and Meta Platforms. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, IonQ, Meta Platforms, Nvidia, Palantir Technologies, and Tesla. The Motley Fool has a disclosure policy.