QBTS Momentum Builds Post Q3 But Valuation Risk Stays: Buy or Wait?

D-Wave Quantum (QBTS) reported robust Q3 2025 results, with revenues doubling year-over-year and beating estimates by nearly 20%, alongside significant gross margin expansion and an 80% sequential increase in bookings to $2.4 million, bolstered by a new €10 million contract. The company's cash reserves grew to $836.2 million, providing a strong financial runway despite anticipated increases in operating expenses for the second half of 2025. However, despite a 245.1% year-to-date stock rally, QBTS shares are deemed overvalued at 250.58x forward price-to-sales, prompting analysts to suggest waiting for a more favorable entry point due to limited near-term upside.

Analysis

D-Wave Quantum (QBTS) delivered strong Q3 2025 results, with revenues doubling year-over-year and beating estimates by 19.8%, alongside a 1,050 basis point expansion in adjusted gross margin to 77.7%. Bookings surged 80% sequentially to $2.4 million, further bolstered by a new €10 million contract, indicating growing commercial traction.

The company's cash and equivalents rose to $836.2 million, providing significant liquidity to fund anticipated operating expense increases of approximately 15% sequentially in H2 2025 for R&D and market expansion. This strong cash position mitigates near-term execution risk despite widening GAAP operating losses.

However, QBTS shares have rallied 245.1% year-to-date, leading to a stretched valuation with a forward 12-month Price/Sales ratio of 250.58x, significantly exceeding its sector average of 6.91x. This elevated valuation, coupled with the Zacks Rank #3 (Hold) rating, suggests limited near-term upside potential.

Key Decisions for Investors

• Investors should monitor D-Wave's future bookings growth and the impact of increased operating expenses on profitability, given the current high valuation.
• Consider waiting for a more favorable entry point due to the stretched 250.58x forward Price/Sales ratio and the stock's significant 245.1% year-to-date rally.
• Evaluate the long-term potential of D-Wave's technological advancements and strong cash runway against the inherent volatility and early monetization phase of the quantum computing market.