D-Wave Quantum specializes in quantum annealing systems focused on optimization tasks.
The company’s valuation profile is reminiscent of the darlings of the dot-com boom.
History suggests that D-Wave stock could be headed for a sharp correction.
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Over the past three years, growth investors have chased just about anything that touches semiconductors, data centers or cloud computing. The reason, obviously, is due to the proliferation of generative artificial intelligence (AI) across all facets of the technology value chain.
But in 2025, a new pocket of the AI realm has taken center stage — and investors are overwhelmingly excited. Some of the best-performing AI stocks last year were quantum computing developers. In particular, pure pieces like Give up the calculation and IonQ have emerged on the scene as speculative leaders of the quantum AI arena.
However, another player has surpassed his cohorts: Enter D-Wave Quantum(NYSE: QBTS)whose shares have soared 211% in 2025, easily outpacing S&P 500, Nasdaq Compositeand all “Magnificent Seven” actions.
As D-Wave stock is firing on all cylinders, smart investors are sure to wonder if the company can continue to rise. Let’s take a look at what drove D-Wave’s meteoric rise last year and analyze the company’s underlying valuation trends to gauge where the stock could be headed in 2026.
D-Wave designs quantum computers that use annealing technology — a method that uses superconducting qubits. In simple terms, quantum annealing systems allow qubits to naturally converge to their lowest energy state.
This approach is useful in optimization-based tasks that require analyzing multiple results for the same application. Today, D-Wave systems are currently being tested in settings such as supply chain management, scheduling, manufacturing and logistics, and portfolio optimization.
Image source: Getty Images.
Last year, the S&P 500 gained about 16%, marking the third straight year the index posted a double-digit gain. According to an analysis published by Fisher Investments, sectors that outperformed the stock market as a whole last year include communications services, financials, materials, industrials, utilities and, of course, technology.
One of the things that makes the D-Wave investment interesting is that the applications of quantum computing are believed to be so vast that the company theoretically has the ability to benefit from increased investment in each of the major industries above. Therefore, speculative investors are pouring capital into D-Wave ahead of its next potential breakout.
While these prospects make following D-Wave’s momentum tempting, is it really a smart idea?
With a share price of $28, D-Wave stock might seem very cheap. But smart investors understand that there is more to a company’s valuation profile than the underlying stock price.
QBTS PS Ratio data by YCharts
Over the past year, D-Wave’s stock growth has fueled pronounced levels of valuation expansion. As of this writing (January 14th), D-Wave boasts a price-to-sales (P/S) ratio of 342. Let’s take a look at how this compares to other megatrends seen in the stock market before.
The AI revolution has drawn many comparisons to the dot-com bubble of the late 1990s and early 2000s. In the early days of the Internet, investors paid absurd premiums for companies that had very little sales or profits—and in some cases virtually zero.
In other words, investors bought more into a narrative about how the Internet would change the world, rather than understanding which companies are truly positioned to benefit from an online ecosystem.
One of the most notable victims of the dot-com era was Cisco Systems. Cisco was the ultimate pick and shovel player of the internet revolution. Every time a new website was created or a data center was built, Cisco routers and networking equipment were called upon.
As we now know, many companies hoping to capitalize on the rise of the Internet were forced to rein in their capital expenditures (capex) as their business ideas failed to gain traction. This reduction in infrastructure was a direct headwind for companies like Cisco — which saw its market cap drop by as much as 89% in the wake of the dot-com bubble.
CSCO Market Cap data by YCharts
Given that D-Wave has nowhere near the clout that Cisco once had, I predict that the company could be in for an even harsher reversal. By the end of this year, I think investors will have woken up to the fact that quantum computing remains primarily an exploratory technology for now — lacking critical commercial scale or enterprise adoption.
By December 2026, I believe D-Wave Quantum will have turned into a bearish knife and could be trading at penny stock levels.
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Adam Spatacco has no position in any of the listed stocks. The Motley Fool has positions in and recommends Cisco Systems and IonQ. The Motley Fool has a disclosure policy.
Prediction: D-Wave Quantum stock will be worth this much by the end of 2026 was originally published by The Motley Fool
