Quantum Rivalry Rises With IBM's Push: Is D-Wave Still a Buy?

Shares of D-Wave Quantum QBTS have captured the spotlight over the past year, soaring an astounding 1359.5%. This rally has been fueled by accelerating demand for quantum technology, broader AI-driven infrastructure boom and the company’s robust quarterly results.However, International Business Machines Corporation's IBM entry into the next phase of quantum computing with its yesterday’s announcement of IBM Quantum Starling, a large-scale, fault-tolerant quantum computer projected to perform 20,000 times more operations than today’s machines, may signal a new competitive threat within this niche. IBM’s roadmap includes tangible plans to deliver fault tolerance and modular scalability by the end of the decade. Big Blue’s latest move, while showcasing its long-term ambition to lead in enterprise quantum solutions, also raises concerns for smaller players like QBTS.With IBM’s renewed push, the quantum race is heating up. Investors must now reassess whether D-Wave Quantum’s fundamentals and growth strategies reflect sustainable leadership or if recent gains could prove overextended amid escalating competitive pressure. Let's find out.Image Source: Zacks Investment ResearchLong-term Tailwinds for QBTSQuantum Supremacy Fuels Confidence: D-Wave Quantum’s first-quarter 2025 achievement of quantum computational supremacy on a real-world materials science problem is now published in Science. Using its 1,200-qubit Advantage2 prototype, the company solved a problem in minutes that would take a top-tier classical supercomputer nearly a million years, consuming more energy than the world produces in a year. This validation separates D-Wave from peers like IonQ IONQ and Rigetti Computing RGTI, which are yet to demonstrate superiority on commercially relevant tasks.Competitive Advantage of Annealing Quantum Computing: D-Wave works on annealing quantum computing, a branch of quantum computing optimized for combinatorial and optimization problems. Unlike rivals focused on gate-based models that are still stuck in development cycles, D-Wave’s systems are built for immediate deployment. Its growing body of production applications supports this.Strong Cash Position Supports Path to Profitability: D-Wave Quantum exited the first quarter of 2025 with a record-high consolidated cash balance of $304.3 million, significantly enhanced by $146.2 million in net proceeds raised through its third At-The-Market (ATM) offering during the quarter. Management now believes this cash position is sufficient to fund operations through to profitability, solidifying D-Wave’s standing as one of the most capital-efficient companies in the quantum computing space.D-Wave Quantum Stock Trades Above 50 and 200-Day Moving AveragesTechnical indicators suggest continued strong performance for D-Wave Quantum. Notably, the 50-day SMA continues to read higher than the 200-day SMA, signaling a bullish trend. This technical strength underscores positive market sentiment and confidence in QBTS’ financial health and prospects.50- and 200-Day SMAsImage Source: Zacks Investment ResearchEstimates for QBTSThe Zacks Consensus Estimate for D-Wave Quantum’s second-quarter and 2025 earnings implies 30% and 72% improvement, respectively, from the year-ago periods.Image Source: Zacks Investment ResearchSign of More Upside for QBTSAs the only quantum computing company to demonstrate real-world quantum supremacy, validated by a peer-reviewed Science publication, D-Wave distinguishes itself from competitors like IonQ and Rigetti Computing, which remain focused on less mature gate-based systems with fewer commercial deployments. While IBM’s investment in quantum might prove a threat for smaller companies, it also validates the opportunity D-Wave is already capitalizing on with its production-ready annealing solutions. Despite IBM’s entry, D-Wave still has a long runway for growth. Backed by strong first-quarter 2025 results, rising enterprise adoption and a Zacks Rank #2 (Buy), QBTS offers more upside potential for long-term investors. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report International Business Machines Corporation (IBM): Free Stock Analysis Report IonQ, Inc. (IONQ): Free Stock Analysis Report Rigetti Computing, Inc. (RGTI): Free Stock Analysis Report D-Wave Quantum Inc. (QBTS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks