Wall Street Focused on D-Wave’s Earnings. Its Bigger Story Came 1 Day Before.

D-Wave Quantum (QBTS) stock went down after an earnings report that disappointed the market, even though there was considerable excitement leading up to it. The stock has struggled this year, unable to repeat the stellar performance of 2025. But looking at just the earnings report for a pre-commercial-scale quantum company isn’t the best way to judge progress. A better way is to look at the product, and that’s where investors may have lost a headline from last week amid the earnings noise.

Just a day before the earnings report, the company announced technological progress that helps it move one step closer to commercial quantum computing. To understand what just happened, let’s take a look at the bottleneck that was stopping researchers from deploying quantum computing at scale. The barrier to useful quantum computing isn’t the qubit count. The problem is that as qubit count increases, the error rates compound, making it impossible to reliably deploy these systems at scale.

D-Wave Quantum's claim is that this breakthrough removes one of the greatest obstacles to error correction, making a commercially viable, fault-tolerant system far more achievable. The CEO, Alan Baratz, said the development proves the company is on the right track and that a commercial fault-tolerant quantum machine is both practical and achievable.

About D-Wave Quantum Stock 

Founded in 1999, D-Wave Quantum develops quantum computing systems, software, and cloud-based services for customers around the world. The company’s offerings include Advantage and Advantage 2 quantum computers, Leap quantum cloud service, Ocean open-source developer tools, and hybrid quantum-classical computing solutions. Its technology helps businesses solve complex problems in areas such as manufacturing, finance, logistics, and drug discovery.

D-Wave Quantum has lagged the broader market over both the past year and year to date. Over the last 12 months, the stock gained around 17%, compared with the S&P 500’s ($SPX) 20% return. This year, the stock has fallen roughly 20% while the index has gained around 14%. The weaker performance reflects investor concerns about the company’s ability to become consistently profitable.

A Valuation Built on Belief, Not Numbers

D-Wave is nearly impossible to value on normal measures since it's still in its early days. The forward price-to-earnings (P/E) is not meaningful, as the company is nowhere near consistent profits yet. The forward price-to-sales (P/S) ratio of 175x is genuinely steep, but it is expected for a pre-commercial company. The P/S multiple also lacks a 5-year average for comparison since the company only went public in August 2022. D-Wave's EPS outlook, on paper, doesn’t help its case for the same reason: it’s too early. Analysts expect losses to continue in the next few years before any meaningful turn. The trajectory does swing towards positive in 2028 and improves further in 2029, which for D-Wave means the losses are expected to narrow. This shows that analysts expect things to get better in the long term, which is what investors are paying up for today.

Its balance sheet is a real strength. D-Wave holds $546 million in cash, against just $48 million in debt, leaving it net cash positive by nearly half a billion dollars. Overall, QBITS' price cannot be justified through numbers today. Investors are making a long-term bet that D-Wave’s technology, like the recent error-correction breakthrough, eventually turns into a real, commercial business.

D-Wave's Weak Quarter Hides a Stronger Pipeline

D-Wave Quantum reported its second-quarter fiscal 2026 earnings on Aug. 6. It reported a wider-than-expected second-quarter loss and revenue below Wall Street consensus. Revenue was $3.07 million, which missed Wall Street consensus of $4.03 million. The earnings per share came in at -$0.13, below analysts' estimates of -$0.09. GAAP gross margin was 55.4%, down from 63.8%. The company’s cash and marketable securities stood at $546.2 million. Bookings rose 59% year-over-year (YoY), helped by large enterprise deals. 

Looking forward, management expects third-quarter revenue to be up modestly from the second-quarter revenue, while fourth-quarter revenue should rise sharply and make up the majority of full-year revenue. The company also expects two annealing quantum computer system deliveries in the fourth quarter, with some related installation and calibration revenue likely to carry into 2027. BMO analyst asked about the integration of Quantum Circuits and whether the two companies' sales pipelines overlap, to which CEO Alan Baratz said the integration has gone very smoothly. He added that D-Wave remains on track to deliver its 17-qubit dual rail quantum system this year. Baratz also noted that customer demand is mixed, with interest in both annealing and gate-model quantum computing technologies. 

What Do Analysts Expect for QBTS Stock?

On Aug. 3, Wedbush assumed coverage of QBTS stock with an “Outperform” rating and a $40 price target. The firm believes long-term winners in the quantum computing industry will be the companies that successfully achieve key technology goals, build profitable and scalable businesses, and grow beyond government contracts. A few days earlier, Rosenblatt Securities also reaffirmed its “Buy” rating with a $43 price target.  

According to 16 Wall Street analysts covering QBTS stock, it carries a consensus “Strong Buy” rating. Their average price target of $34.67 implies a further 64% upside from the current share price. In addition, the highest price target of $43 suggests an impressive 103% upside from here.