D-Wave Quantum (NYSE: QBTS) has captured the imagination of investors who believe that its technology will prove revolutionary. In the last year alone, the stock price is up by more than 400% as investors rushed into the quantum trade. But what if you had invested three years ago, just months after the company’s entrance into the public market?
D-Wave went public via a special purpose acquisition company (SPAC) merger in August 2022, debuting at $10 per share. It then cratered to below $2 a share by mid-December.
If you’d invested $1,000 at that brutal low, you’d have nearly $17,700 today with shares trading just shy of $30. That’s quite a return.
Here’s the uncomfortable truth, though: D-Wave generated just $24.14 million in sales over the last 12 months. The company trades at a market cap exceeding $10 billion. That’s a price-to-sales ratio north of 400. The company had a net loss of nearly $400 million in the same period.
Before chasing “what if” returns on speculative tech stocks, remember that D-Wave nearly faced delisting just 18 months ago, and its rise since has been fueled mainly by hype and speculation, pure and simple. The quantum computing thesis is compelling long-term, but the technology remains far too experimental at this point to jump in at this valuation.
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