Why This Five-Star Analyst Hiked His Price Target on D-Wave Quantum Stock (QBTS)
Quantum computing stock D-Wave Quantum (QBTS) has seen its stock soar over the past year, thanks to a massive 1,174% rally. Despite this, five-star Roth MKM analyst Sujeeva De Silva hiked his price target on QBTS stock from $12 to $18 on Friday, while maintaining a Buy rating.
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It is worth noting that De Silva ranks 101 out of more than 9,621 analysts tracked by TipRanks and has a success rate of 51%, with an average return per rating of 26% over a one-year timeframe.
Demand for Quantum Computing Is Gaining Traction
According to De Silva, demand for quantum computing is gaining traction across both commercial and AI-related sectors, and D-Wave is well-placed to benefit from this trend. The analyst noted that customer interest has grown in recent months, especially in areas like hosted services and hardware sales, which could help expand the company's revenue base over time. He also pointed to the rising engagement from the AI space, where quantum computing is gaining attention as a tool to improve certain performance steps. As AI use cases become more complex, demand for D-Wave's offerings could grow.
On the hardware front, the analyst said that D-Wave's first sale of its Advantage system to a key customer is a good early sign. He believes that the company could secure more hardware deals going forward, with future sales possibly coming at higher price points. With the new Advantage 2 system now officially launched, De Silva thinks that hardware talks could move more quickly toward actual deals.
While De Silva admits the $18 price target reflects a 'significant multiple,' he believes that it is justified. If D-Wave is able to close several hardware deals each year, future revenue could better support the current valuation. As a result, in his view, D-Wave stands out as one of the most compelling players in the fast-growing world of quantum computing and AI.
Is D-Wave a Good Stock to Buy?
Overall, analysts have a Strong Buy consensus rating on QBTS stock based on six Buys assigned in the past three months, as indicated by the graphic below. Furthermore, the average QBTS price target of $14.20 per share implies 11.3% downside risk.
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