D-Wave Quantum may not always get respect from entities such as the U.S. government's defense research agency. But D-Wave has been the best performer among quantum computing stocks in 2025. The company actually sells quantum machines amid fierce debate over the technology's path to commercialization. In fact, D-Wave is considered an elder statesman in a futuristic technology.
"We are the oldest quantum computing company in the world and were the first to start working on developing a quantum computer," Chief Executive Alan Baratz told Investor's Business Daily. "We are the first to have quantum computers in the market supporting business applications in production. Also, we are the first to demonstrate quantum supremacy on an important, useful problem."
Quantum computing works on a subatomic level and uses exotic technologies, like super-cold superconductor chips. Further, quantum computing builders aim to solve problems too complex for today's classical, semiconductor-based computers.
D-Wave stands out as the chief developer of one flavor of quantum technology. Founded in 1999 by researchers from the University of British Columbia in Canada, the company pioneered the process called "quantum annealing."
DARPA Quantum Computing Program
Most quantum computing companies are focused on building "gate model" quantum computers using different "qubit" technologies, such as superconducting chips, trapped ion, and photonic qubits. That includes tech giants such as Google-parent Alphabet, Microsoft and IBM.
For D-Wave, getting recognition has been a challenge despite over two decades of quantum computing achievements.
The U.S. Defense Advanced Research Projects Agency (DARPA) in April chose 20 companies for stage one of its Quantum Benchmarking Initiative, a program aimed at assessing the feasibility of developing industrially useful quantum computers. DARPA picked IonQ and Rigetti Computing to participate, but not D-Wave.
"DARPA is unfortunately, and I think to the disadvantage of the U.S. government, single-mindedly focused on gate model quantum computing," Baratz said. "If you look at those grants, they all went to gate model."
While DARPA indicated it was open to an annealing-based proposal, D-Wave's application was rejected "out of hand," he said. "DARPA did not request a verbal presentation as a follow-up," he noted.
"They were clearly biased and focused on the gate model. They need to get their act together because governments around the world get the importance of annealing and the importance of near term applications," Baratz said.
Advantage2 Systems Debut
In a recent report, JPMorgan stated: "D-Wave's quantum annealing systems have demonstrated practical applications in optimization but face questions about broader applicability."
D-Wave in February won a big systems deal in Germany. The Jülich Supercomputing Centre, a research institute, bought one of D-Wave's quantum systems.
In May, D-Wave announced the general availability of its sixth-generation quantum computer, Advantage2. Customers can access the system through D-Wave's quantum cloud computing service, which was launched in 2018.
IDC analyst Heather West in a report noted that Davidson Technologies in Huntsville, Ala., plans to install an on-premises Advantage2 system.
"This marks one of the first such deployments in the United States and reinforces the feasibility of integrating quantum computing into mission-critical environments such as defense and national security," she said. "For other enterprises, this installation serves as a proof point that D-Wave's quantum solutions are mature enough for on-site use."
Other D-Wave customers have included Mastercard, Japan's NTT DoCoMo, Japan Tobacco, Ford Otosan and supermarket operator Pattison Food Group.
Quantum Computing Pioneer
In 2007, D-Wave demonstrated a 16-qubit quantum annealing prototype, marking the first public demonstration of a quantum computer.
In 2011, D-Wave released the 128-qubit D-Wave One, the world's first commercially available quantum computer. And, in 2013 Google launched its Quantum Artificial Intelligence Lab in partnership with NASA and D-Wave, focusing on quantum annealing research.
While D-Wave is upbeat on the future of annealing quantum technology, it also has a development program going on in gate-model superconducting quantum computers.
"The belief is that both types of quantum computers will coexist for a while," Doug Finke, chief content officer of Global Quantum Intelligence told IBD. "D-Wave's position is that they will be the only company that can provide both types of solutions, so their customers would be able to choose the technology that is most applicable to their particular problem."
"Some industry experts are not so sure about the long term," Finke added. "They will argue that as the gate-based machines get larger, more powerful, and implement error correction, any advantage that annealers have will go away. They will say that the gate-based machines would be able to process any quantum application while the annealers will never be able to do so."
D-Wave R&D Targets Gate Model
Baratz said that D-Wave has been open about plans to develop gate model quantum computers.
"Annealing is very good at solving optimization problems and we know that gate model systems are not good at solving optimization problems," he said. "There are applications for which gate is the best approach to quantum for things like quantum chemistry and molecular discovery. Most of the important, hard problems that businesses need to solve are optimization problems, like automotive body assembly scheduling, or last mile routing for delivery, or protein folding. But we can't solve everything."
Quantum computers use quantum bits known as qubits to encode information. Quantum computers generate and control logical qubits to perform computations. But qubits are sensitive to disturbances in their operating environment. As a result, qubits are prone to errors, which have been compounded as systems are scaled up in size.
Quantum Computing Competition
Annealing quantum systems have been easier to scale up so far. D-Wave's sixth-generation Advantage2 system has over 4,400 qubits.
But the quantum computing race will take place over decades. UK-based Oxford Quantum Circuits in early June released a roadmap to a 50,000 qubit machine by 2024.
D-Wave rivals include tech giants, public companies such as IonQ, Rigetti and Quantum Computing as well as a big wave of startups. They include QCI, Pasqal, PsiQuantum, Seeqc, Xanadu and many others. Nvidia reportedly has been in talks to invest in PsiQuantum in a new funding round.
Then, there's Honeywell International's Quantinuum, which recently announced a deal with Qatar's Al Rabban Capital in what officials said could be a $1 billion joint venture over the next 10 years. Honeywell owns 52% of Quantinuum.
Quantum Computing Stocks Profitability
Baratz has told Wall Street analysts that D-Wave "will be profitable before any of the other pure-play quantum companies."
"The main reason is because we're already commercial," he said. "We have a handful of customers that are using our systems today as part of their business operations. We have others that we're working with to develop applications on the path to moving them into production whereas everybody else is still in the R&D phase."
In the March-ended quarter, D-Wave reported a 2-cent loss on an adjusted basis versus an 11-cent loss a year earlier. Revenue rose 509% to $15 million, owing to the German research center deal.
Still, D-Wave hasn't said in what fiscal year it expects to turn profitable.
Baratz agreed with analysts that D-Wave's revenue will be "lumpy" because large system sales will be occasional, not regular. But Baratz expects revenue to smooth out as more customers move applications into production.
Baratz took over as D-Wave CEO in 2020. He earlier headed the company's R&D. Baratz was an executive at Cisco Systems, IBM and Sun Microsystems prior to joining D-Wave in 2017.
D-Wave board members include Roger Biscay, a current Cisco senior vice president. Cisco has been focused on quantum communications networks rather than quantum computing.
D-Wave Plans Equity Offerings Up To $400 Million
D-Wave became a public company in 2022 through a merger with blank check company DPCM Capital and the same year opened a new headquarters in Palo Alto, Calif. It had been based in Vancouver.
D-Wave had $304 million in cash on its balance sheet as of March 31. In May and June, it raised $96 million in cash from the exercise of warrants related to the 2022 merger with DPCM Capital.
And, in a regulatory filing on June 10, D-Wave said it plans to raise up to $400 million through occasional equity offerings.
With more cash on its balance sheet, D-Wave could turn acquisitive and speed up its move into gate model quantum technology. Rival IonQ has been building a quantum platform through acquisitions.
D-Wave holds 250 U.S. patents and has 500 granted and pending patents globally, placing it in the top five quantum computing portfolios worldwide, Baratz said.
He added: "We've got a massive patent moat around annealing. Most likely, if a Big Tech (company) wanted to go into that space, they would have to look at acquiring us. But, you know, we're not currently for sale."
Quantum Computing Stocks In 2025
The best performer in 2025 among quantum computing stocks, D-Wave stock has gained 90%. IonQ has retreated 6%, Rigetti is down 16% and Quantum Computing has advanced 7%.
Meanwhile, quantum computing stocks have been volatile in 2025 amid controversy involving Nvidia over how soon commercially viable quantum technology will become available.
On June 11, Nvidia Chief Executive Jensen Huang turned more optimistic on quantum technology, saying it was near an "inflection point." Quantum computing stocks climbed on the news.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
