DWave: Quantum Catastrophe
Ferox Point Equity Research is bearish on DWave (Ticker: QBTS). Below is a summary of our thesis. Read the full report by clicking on the “READ FULL REPORT” button.
D-Wave faces significant competitive and structural headwinds that call its long-term viability into question. Unlike gate-based quantum computing pursued by giants like Google, Amazon, and IBM—universally applicable and backed by deep resources—D-Wave’s annealing approach remains a niche technology limited to optimization problems that classical and future gate-based systems can already address. While the company saw a temporary revenue spike from a one-time $13M sale to Forschungszentrum Jülich, this does not represent sustainable growth. Excluding this transaction, revenues remain flat and have consistently fallen short of projections, including a missed $72M SPAC target in 2024.
Despite more than two decades in business and high-profile clients such as Volkswagen, Mastercard, and Lockheed Martin, awareness has not translated into meaningful adoption. Recent claims of “quantum advantage” have been challenged by classical researchers, undermining D-Wave’s credibility, while its hybrid solvers raise transparency concerns about how much work is truly quantum. Ultimately, with stagnant revenues, limited market adoption, and a competitive landscape dominated by better-capitalized gate-based players, D-Wave’s current ~$4B valuation appears misaligned with its fundamentals and difficult to justify without a major commercial breakthrough.
This report is provided for informational and research purposes only and does not constitute financial, investment, or trading advice. Nothing contained herein should be construed as a recommendation to buy, sell, or hold any security. All opinions expressed are those of Ferox Point Equity Research at the time of publication and are subject to change without notice.
Ferox Point Equity Research, its members, and affiliates may hold positions in securities mentioned in this report, including but not limited to D-Wave Systems, Inc. (QBTS).
Past performance is not indicative of future results. Investors should conduct their own due diligence before making any investment decisions.
