D-Wave Quantum (QBTS) has captured attention in the quantum computing space with an impressive 474.9% rise in the stock’s value in 2024. The surge has been fueled by increasing institutional interest and major partnerships, but it still has investors wondering if the company can maintain this momentum.
QBTS has made substantial strides in optimizing quantum computing solutions for industries like telecommunications, AI, and logistics. Recently, the company secured partnerships with key players like NTT DOCOMO and Japan Tobacco, emphasizing its growing footprint in both the commercial and government sectors. The company’s recent 52-week high and the positive outlook from investors have fueled excitement around its potential.
The rapid rise in stock price has raised concern among investors, especially considering the company’s modest revenues and significant losses. Despite the growth in quantum computing, QBTS posted a 27% decline in overall revenue, with an 80% drop in professional services revenue for Q3 2024. Analysts project that D-Wave’s revenue could grow by nearly 70% in 2025, but this still represents a small share in the larger quantum computing market.
QBTS Has Poor Upside Potential, Fair Safety, and Excellent Timing
VectorVest is a proprietary stock rating system that distills complex technical and fundamental data into 3 simple ratings, saving you time and stress while empowering you to win more trades.
These are relative value (RV), relative safety (RS), and relative timing (RT). Each sits on a scale of 0.00-2.00 with 1.00 being the average, making interpretation quick and easy.
You’re even given a clear buy, sell, or hold recommendation for any given stock at any given time based on its overall VST rating. Here’s what you need to know about QBTS:
- Poor Upside Potential: The RV rating measures a stock’s potential for long-term price appreciation. D-Wave's RV is 0.05, indicating limited long-term growth potential. This suggests that D-Wave may struggle to generate substantial price increases in the coming years.
- Fair Safety: The RS rating is a measure of the company’s financial stability and risk. D-Wave has an RS rating of 0.70, which indicates some financial risk. Its performance is inconsistent compared to industry peers, making it a riskier investment for those looking for stability.
- Excellent Timing: The RT rating measures a stock’s price momentum. D-Wave’s RT rating of 1.81 reflects strong positive momentum in the short term. The stock is benefiting from growing investor interest in quantum computing and optimism around its future.
With a VST rating of 1.19, QBTS is rated a HOLD. While the stock shows strong short-term momentum, its weak upside potential and fair safety mean that it may not be the best investment for those seeking long-term growth.
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VectorVest recommends buying safe, undervalued stocks rising in price. QBTS has seen strong growth, driven by advancements in quantum computing. However, its upside potential is limited, with fair safety and excellent timing.
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