BMO Capital initiated coverage with an Outperform rating and a $35 price target.

  • BMO cited D-Wave’s commercial revenue and early-mover advantage as key strengths. 
  • The firm also highlighted the company’s annealing and gate-model quantum systems.
  • On Tuesday, D-Wave Quantum and NTT DOCOMO launched a second quantum computing application in DOCOMO’s network.

D-Wave Quantum Inc. (QBTS) stock gained premarket on Friday after BMO Capital initiated coverage with an ‘Outperform’ rating. Analyst Harsh Kumar cited the quantum computing company’s commercial revenue, first-mover advantage, and dual-technology strategy, placing D-Wave among the sector’s strongest candidates for long-term commercial success. 

BMO Sees 86% Upside For D-Wave Quantum 

Analyst Kumar began coverage of D-Wave Quantum with a $35 price target, implying an 86% upside to the stock’s last closing price. He pointed to the company's commercial progress and position within the rapidly developing quantum computing industry.

BMO described D-Wave as an unusual player in the sector because it has already generated meaningful commercial revenue from quantum computing. The firm believes that this early business activity could give D-Wave an advantage as the broader industry works to move quantum technology from research projects into practical applications.

Kumar also highlighted D-Wave's two-part technology strategy, annealing and gate-model quantum systems. BMO Capital sees the combination as a potential strength because it gives the company multiple avenues to pursue customers and develop commercially useful quantum solutions.

D-Wave Quantum stock traded over 1% higher in Friday’s premarket. The stock is also looking to reverse two straight months of losses. 

D-Wave Expands Quantum Computing Use 

On Tuesday, D-Wave Quantum and NTT DOCOMO deployed a second quantum computing application in DOCOMO’s live network. The new system optimizes mobile network tracking areas, cutting peak location-registration signals by 65.3% and paging signals by 7%. The lower signaling load can help DOCOMO improve network efficiency.

Additionally, D-Wave Quantum received up to CAD $300,000 ($218,110) from Canada’s National Research Council to develop software for commercial quantum computing applications. 

Earlier this month, the company reported second-quarter revenue of $3.1 million, missing the analysts' consensus estimate of $4.3 million, according to Fiscal Ai data. 

What QBTS Retail Traders Are Saying 

On Stocktwits, retail sentiment around the stock 

A user said, “This is why I don’t care about the price right now. This is basically like PLTR when it start. The QBTS Connection: D-Wave is the most "Palantir-like" company in the quantum space.” 

Another user said, “interest rate hikes will eat this one alive. Yield increases are murderous to companies needing capital. Look at any non profitable company during 2022 rate hikes.”

QBTS stock has cratered 28% year-to-date. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.<