BMO Capital initiated coverage of D-Wave Quantum Inc. (QBTS) with an Outperform rating, sending the stock higher in Friday premarket trading.
Analyst Harsh Kumar set a $35 price target on QBTS, implying an 86% upside from the stock’s most recent closing price.
Kumar cited D-Wave’s commercial revenue generation, first-mover advantage, and dual-technology strategy as the primary reasons for his bullish outlook on the company.
BMO described D-Wave as an unusual player in the quantum computing sector because it has already generated meaningful commercial revenue, setting it apart from peers still in research phases.
The firm believes D-Wave’s early business activity could provide a durable 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 approach, covering both annealing and gate-model quantum systems, which BMO views as a potential competitive strength.
That dual strategy gives the company multiple avenues to pursue customers and develop commercially useful quantum solutions, according to the analyst’s assessment.
QBTS stock traded over 1% higher in Friday’s premarket session, looking to reverse what has been two consecutive months of losses for shareholders.
The stock remains down 28% year-to-date, reflecting the broader pressure on unprofitable technology companies navigating a challenging capital environment.
On Tuesday, D-Wave Quantum and NTT DOCOMO deployed a second quantum computing application inside DOCOMO’s live network, optimizing mobile network tracking areas and cutting peak location-registration signals by 65.3% and paging signals by 7%.
The lower signaling load is expected to help DOCOMO improve overall network efficiency as quantum-powered commercial deployments continue to expand.
D-Wave Quantum also received up to CAD $300,000, equivalent to approximately $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 analyst consensus estimate of $4.3 million, according to Fiscal AI data.
On Stocktwits, one retail trader drew a comparison to another high-profile tech company, saying, “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.”
Not all retail sentiment was positive, with another user warning, “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.”
