D-Wave Quantum‘s (QBTS -1.82%) stock surged more than 1,480% over the past 12 months. That explosive rally, which lifted it from its all-time lows, was driven by the market’s growing enthusiasm for quantum computing stocks.

But with a market cap of $5.4 billion, it trades at a whopping 222 times this year’s sales and 142 times next year’s sales. Should investors still buy D-Wave’s stock and expect it to grow into those nosebleed valuations? Let’s review its business model, upcoming catalysts, and challenges to decide.

Image source: Getty Images.

What does D-Wave Quantum do?

Traditional computers still store their data in binary bits of zeros and ones. Quantum computers can store those zeros and ones simultaneously in qubits, which lets them process larger quantities of data at a much faster rate than their traditional counterparts.

Yet quantum computing systems are also larger, pricier, and consume a lot more power than traditional servers and mainframes. That’s why they’re still mainly used for niche research projects at universities and government agencies instead of mainstream computing applications.

D-Wave could change that perception with its quantum annealing tools, which are used to streamline a company’s workflows, supply chains, and logistics networks. It runs those processes through different scenarios, and it identifies the processes that consume the least power as the most efficient ones. In other words, it’s a quantum-powered “efficiency expert” that maps out multiple outcomes faster than traditional analytics tools.

D-Wave designs its own quantum processing units (QPUs) and Advantage quantum systems to support those services. It also provides those services remotely through its cloud-based Leap platform, which can be integrated into public cloud platforms like Amazon Web Services (AWS) and Microsoft Azure.

More than 100 major customers — including Deloitte, Mastercard, Volkswagen, Lockheed Martin, and Accenture — are already using D-Wave’s services. However, most of those customers are still running its low-revenue pilot and research programs on Leap instead of using its tools to overhaul their businesses.

How fast is D-Wave growing?

D-Wave still generates most of its revenue by selling its Advantage quantum systems, but those sales cycles are long and unpredictable. That’s why its sales surged in 2022 and 2023, flatlined in 2024 as its system sales stalled out, but surged again in the first half of 2025.

Data source: D-Wave Quantum. YOY = Year-over-year.

However, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) stayed negative as its net losses widened. Like most of its quantum computing peers, it’s expected to stay unprofitable for the foreseeable future as it scales up its business.

For 2025, analysts expect D-Wave’s revenue to surge 178% to $24.6 million. A lot of that growth will be driven by the rollout of its new 4,400 qubit Advantage2 quantum system, which solves 3D lattice problems roughly 25,000 times faster than its first-gen system while consuming less power. Its rising sales of those systems should reduce its dependence on its cloud-based services. Analysts expect D-Wave’s revenue to rise 56% to $38.3 million in 2026, and increase another 85% to $71 million in 2027. We should take those estimates with a grain of salt, but they imply that it can eventually grow into its frothy valuations.

Is it the right time to buy D-Wave’s stock?

D-Wave’s stock is expensive. It will likely keep diluting its investors with more stock offerings as long as it remains unprofitable, and it’s unclear if it can keep selling enough Advantage2 systems (which cost $20-$40 million each) for economies of scale to kick in. But in the long run, D-Wave’s focus on mainstream computing applications could give it an edge against other quantum computing companies that focus on experimental applications. So while I certainly wouldn’t invest my life savings in D-Wave’s stock, I’d be willing to nibble on it today and accumulate more shares if it successfully expands its fledgling business.