Growth investors are always on the lookout for the next possible tech megatrend that has the potential to create life-changing wealth for those who buy in early. If the more optimistic projections are accurate, quantum computing could be that next trend, and it could start delivering on its promise within the next five years.
D-Wave Quantum(NYSE: QBTS) is one of a number of publicly traded pure-play quantum computing specialists trying to make a name for themselves. But what might the next half-decade have in store for its investors?
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Conventional computers store and process data in bits, which can only be in one of two states: 1 or 0. Quantum computers use “qubits,” which (through the peculiar properties of quantum mechanics) can temporarily exist in a state called superposition — having values that are neither 1 nor 0, but probability amplitudes. This allows them to perform calculations in an entirely different way from the digital devices we use every day. If they can be made to work in a reliable and cost-effective way, quantum computers could have numerous commercial applications, as they can, in theory, rapidly solve certain unusually complex types of problems that would take the world’s most powerful supercomputers years or centuries.
Among the most commonly cited potential real-world applications for quantum computing are pharmaceutical drug discovery, materials science, logistics, and cybersecurity. But as with many new technologies, more applications are likely to emerge as it matures. And the timelines for bringing this technology to market in a serious way seem remarkably optimistic.
Industry leader IBM, which has been working on the technology since the 1980s, has said it believes it will be able to build a large-scale fault-tolerant quantum computer by 2029. Alphabet is also setting an aggressive timeline, projecting that commercially viable quantum computers could be ready within five years.
Two of the key challenges every company working on this technology is trying to solve are error mitigation and correction. Qubits are incredibly sensitive to outside interference, and as a result, they can easily switch states, resulting in the computers delivering incorrect results. In late 2024, Alphabet impressed the tech world by announcing that its Willow quantum chip had solved a key aspect of the error correction problem. That could pave the way for useful large-scale quantum computing systems.
At first glance, it’s difficult to imagine how a small, relatively poorly capitalized start-up like D-Wave Quantum can hope to compete with industry giants like IBM and Alphabet. The larger companies have more experience developing technology and dramatically more money to spend on their efforts. For example, Alphabet spent $48.32 billion on research and development in 2024 alone. That’s roughly six times D-Wave Quantum’s entire market capitalization.
That said, D-Wave might be able to capture a slice of this new market because it’s developing a variant of the technology that few others are pursuing: quantum annealing. These types of quantum computers are designed not to find necessarily the best single answer to the complex calculations they are handling, but answers that are extremely close to optimal. This would make them particularly useful in applications like logistics, manufacturing, machine learning, and finance.
Image source: Getty Images.
While experts generally agree that commercially viable quantum computers are at least half a decade away, D-Wave Quantum has made a few early sales of its quantum annealing devices — likely for experimental purposes. This month, Florida Atlantic University signed a $20 million contract to purchase and install one of D-Wave’s Advantage2 quantum annealing computers on its campus in Boca Raton. And several other deals were recorded in 2025.
To understand where D-Wave Quantum will be in five years, it makes sense to look at its current operations. The picture is complex. On the positive side, its revenue surged 100% year over year in the third quarter to $3.7 million. But that’s an extremely small number for a company with a market cap of over $8 billion. Shares trade at an eye-popping price-to-sales multiple of 286. For reference, the S&P 500‘s average P/S ratio is 3.5.
This lofty and speculative valuation prices D-Wave for years of perfection, leaving the stock with little room for fundamentals-driven growth. And that’s not even considering the risks that commercially viable quantum may take longer to actualize than industry leaders expect, or that D-Wave won’t be among the industry’s winners. In that light, D-Wave remains a speculative and risky pick. Investors should wait on the sidelines at least until its valuation drops to a less stratospheric level or more information supporting its investment thesis becomes available.
Before you buy stock in D-Wave Quantum, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and D-Wave Quantum wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $450,256!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,171,666!*
Now, it’s worth noting Stock Advisor’s total average return is 942% — a market-crushing outperformance compared to 196% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and International Business Machines. The Motley Fool has a disclosure policy.
