QBTS stock is a buy, Roth Capital says

After attending a peer’s investor day, Roth Capital analyst Suji Desilva is encouraged by the growing interest in quantum computing and in D-Wave Quantum (D-Wave Quantum Stock Quote, Chart, News, Analysts, Financials NYSE:QBTS).

In a research update to clients September 20, Desilva maintained his “Buy” rating and one-year price target of $5.00 on QBTS.

While the analyst says investors need to be patient in the space, there is clear promise.

“While the revenue opportunity in quantum computing remains early, we are encouraged by the growing customer interest in addressing a “harder” set of problems such as linear optimization, simulation, AI training, and cryptography. Quantum computing system performance benefits from
exponential compute growth with the number of algorithmic qubits. We expect the quantum computing market to be catalyzed by three phases/ milestones: 1) enterprise grade reliable quantum computing, 2) quantum system performance advantage versus classical compute, and 3) availability of fault tolerant quantum computing. IONQ discussed customer examples across computer vision (Hyundai), logistics (Airbus), and molecular modelling (Oak Ridge National Laboratory). We note that both IONQ and QBTS are partnering with QuantumBasel in Switzerland, a quantum computing hub effort to promote adoption

Desilva adds that QBTS is already a leader in the quantum computing sector.

“We believe that QBTS has already achieved enterprise grade reliability for its hosted quantum annealing QCaaS offering,” the analyst argued. “QBTS has demonstrated a robust development on-boarding process and quantum performance advantage in securing its 60+ commercial customer to-date in our view. While commercialization of the company’s gate model quantum computers remains a few years away, we are encouraged by QBTS’s progress with technology and development tools on this front.”