Billionaire Ken Griffin Just Bought a Quantum Computing Stock That Could Soar by as Much as 101%, According to Wall Street

Citadel increased its stake in D-Wave Quantum (NYSE: QBTS) by purchasing 169,057 shares in Q3, while also holding options positions; Wall Street analysts’ average 12‑month target is $38 (implying ~59% upside) and Needham’s target is $48 (~101% upside). D‑Wave develops quantum‑annealing systems for niche optimization tasks, but despite impressive revenue growth the company remains loss‑making with negligible broad commercial adoption; insiders (CEO, CFO, board members) have been selling shares. The stock trades at an extreme price‑to‑sales ratio of 294 (Dec. 16) and the author warns valuation multiples of this magnitude are unsustainable, recommending the security only for traders able to accept outsized volatility.

Analysis

Market structure: The immediate winners are incumbent AI/semiconductor vendors (e.g., NVDA) and cloud integrators that provide classical compute and hybrid optimization services; the loser set includes pure-play quantum hardware names like QBTS where demand is niche and price is driven by narrative, not unit economics. With QBTS trading at ~P/S 294 and Citi/Citadel options activity, supply (shares + potential dilution) overwhelms real commercial demand, compressing pricing power for pure-plays while benefiting scalable software/hardware platforms that can monetize enterprise spend.

Risk assessment: Tail risks include a cash-runway-driven equity/dilution shock (forcing >30% dilution within 12 months), failure of annealing to deliver clear enterprise ROI (3–7 year adoption horizon), or an options-driven short-squeeze that spikes volatility. Near-term (days–weeks) expect large intraday moves and elevated IV; medium-term (3–12 months) expect valuation rerating if sales don’t scale; long-term (2–5 years) outcome hinges on demonstrated enterprise wins and cloud partnerships.

Trade implications: Tactical positioning should be asymmetric and defined-risk: favor short/hedge exposure to QBTS vs long exposure to NVDA/established cloud players. Use 9–12 month put spreads on QBTS (cap loss) sized 0.5–1% portfolio and a matched dollar long in NVDA or SOC/AI infrastructure for 1–2% portfolio to capture rotation from narrative tech to durable compute leaders.

Contrarian angles: The market underestimates the possibility that annealing finds profitable, narrow enterprise niches (logistics/sampling) — but that doesn’t justify current multiples. Reaction is closer to overdone on headline optimism; however a short squeeze or a surprise large enterprise contract could rapidly re-rate shares. Trade with explicit triggers: flip long only after 12-month recurring revenue growth >100% and insider buying; cover shorts if QBTS trades >2x current price on confirmed, recurring enterprise contracts.

Key Decisions for Investors

• Establish a defined-risk bearish position in QBTS: buy 9–12 month put spread sized 0.5–1.0% of portfolio notional (long ~35% OTM put, short ~15% OTM put) to profit from mean reversion in the P/S multiple; close if revenue guidance confirms >100% YoY ARR growth or insiders materially buy within 90 days.
• Implement a pair trade: short QBTS (cash or synthetic) and go long NVDA equal-dollar (1–2% portfolio) to rotate from speculative quantum narrative to proven compute/AI monetization; rebalance if the spread moves >30% in 3 months or NVDA/market catalysts change.
• Avoid concentrated long exposure to small-cap quantum names. Reallocate 2–3% of equity from speculative quantum hardware into semiconductor/AI infrastructure (NVDA, select cloud integrators) over the next 30 days to reduce valuation and dilution risk.
• If seeking a low-probability upside play, buy 12–18 month QBTS call or call spread sized <=0.5% only after two confirmations: (a) a multi-quarter trend of rising enterprise bookings and (b) cessation of insider sales for ≥90 days; otherwise keep exposure minimal and time-limited.