IonQ (NYSE: IONQ) and D-Wave Quantum (NYSE: QBTS) are both early movers in the quantum computing market. However, both stocks have declined by more than 20% this year as investors pivoted toward more conservative investments. Which of these quantum stocks has a better shot at bouncing back in 2026 and beyond? Image source: Getty Images. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks » T ...

Rigetti Computing (NASDAQ: RGTI) and D-Wave Quantum (NYSE: QBTS) are two stocks that rewarded investors with incredible returns, but even after their recent retreat from their October highs, I think they have a lot further to fall. Even now, with Rigetti shares trading at $16 and D-Wave at $20, their valuations are disconnected from reality and any business fundamentals, and that could soon be a serious problem for investors. Where to invest $1,000 right now? Our analyst team just revealed what they belie ...

Core Insights - D-Wave Quantum Inc. (QBTS) is set to release its Q4 and full-year 2025 results on February 26, 2026, with mixed investor sentiment influenced by recent commercial successes and the rollout of its Advantage2 quantum computing platform [1][8] Financial Performance - QBTS shares experienced a modest increase of 2% during the October-December period, amid a broader technology-sector sell-off due to interest-rate uncertainty and geopolitical tensions [2] - The Zacks Consensus Estimate for Q4 indicates a loss of $0.05 per share, reflecting an 86.5% improvement from the previous year's loss, with revenues expected to reach $4.14 million, representing a 79.1% year-over-year growth [5][8] - For the full year 2025, revenues are projected to increase by 194.1%, with the bottom line expected to improve to a loss of $0.20 per share from a loss of $0.75 a year ago [6] Commercial Progress and Market Expansion - D-Wave's Q4 is anticipated to show continued commercial traction, with bookings exceeding $12 million, bolstered by a €10 million agreement in Italy [9][10] - The sales pipeline has expanded, featuring larger average deal sizes, including significant agreements with large enterprises and government entities [10] Technology Execution and Deployment - The rollout of the Advantage2 platform is expected to continue, with operational advancements noted in U.S. government engagement and potential classified-use certification [11] - Progress on the Advantage3 prototype chips is nearing completion, which may enhance long-term scalability despite potential increases in operating expenses [12] Financial Trends and Balance Sheet - In the first nine months of 2025, revenues reached $21.8 million, a 235% increase year-over-year, with strong adjusted gross margins of 87.8% [13] - D-Wave's cash balance stood at $836.2 million as of September 30, 2025, providing significant financial flexibility for ongoing technology development and commercial expansion [14] Competitive Positioning - D-Wave's valuation is high, with a forward price-to-sales ratio of 147.89, significantly above the industry average of 3.36, indicating potential pullback risks if results disappoint [21] - The company currently holds a Zacks Rank of 3, suggesting a neutral outlook [20] Overall Assessment - D-Wave is making strides in technology and market adoption, but high valuation and margin pressures create a challenging risk-reward balance in the near term [23]

Core Insights - Quantum computing stocks, particularly IonQ, Rigetti, and D-Wave, have seen extraordinary returns, with trailing 12-month gains ranging from 670% to 6,217% [2] - The technology is expected to create significant economic value, with estimates ranging from $450 billion to $850 billion by 2040, and a $1 trillion addressable opportunity by 2035 [7] Company Performance - Insiders at IonQ, Rigetti, and D-Wave have sold approximately $615 million more in shares than they have purchased over the past year, indicating potential concerns about stock valuation [14][20] - IonQ's market cap stands at $12 billion, while Rigetti's is at $5.1 billion, reflecting their positions in the market [13][16] Market Trends - The rise of quantum computing has been fueled by significant investments, including JPMorgan Chase's $1.5 trillion Security and Resiliency Initiative, which identifies quantum computing as a key area for future financing [8] - Major companies like Amazon are already utilizing quantum computing through services like Braket, which enhances the credibility and market presence of IonQ, Rigetti, and D-Wave [9] Insider Activity - No insiders at Rigetti have purchased shares in the past year, while D-Wave had minimal insider buying, suggesting a lack of confidence in stock valuation [17] - In contrast, two directors at IonQ have invested approximately $2.1 million in their own company, indicating some level of confidence [17] Industry Outlook - Quantum computing is still in its early commercialization stages, and historical trends suggest that new technologies often face significant challenges and corrections during their growth phases [19] - Analysts caution that the high price-to-sales ratios of quantum computing stocks may not reflect their long-term potential, as the technology is still being optimized for practical applications [18]

Company Overview - D-Wave Quantum experienced a significant share price increase of 211% last year but has seen a decline of 25% as of February 13, 2026 [1] - The company is set to report its fourth-quarter and full-year 2025 earnings on February 26, 2026 [1] Earnings Performance - Post-earnings price movements for D-Wave have been unpredictable, with a 6% rise following the first and second quarter earnings in 2025, but an 18% drop after the third quarter earnings despite a 235% increase in revenue and a 353% increase in gross profits year over year [2] Industry Environment - The quantum computing sector is currently facing challenges, with the tech industry experiencing headwinds due to concerns over high capital expenditures in AI technology [3] - Investors are becoming more risk-averse, which negatively impacts pure-play quantum computing companies that are not yet profitable and have high valuations [3] Valuation and Financial Health - D-Wave trades at over 200 times trailing sales and reported a net loss of $313 million over the first three quarters of 2025 [4] - The company is considered expensive even after recent declines, leading to skepticism about its future performance [4] Investment Considerations - D-Wave Quantum was not included in a list of the 10 best stocks recommended by analysts, suggesting a lack of confidence in its investment potential at this time [5]

Group 1 - D-Wave Quantum Inc. has made significant strides in 2026, including the $550-million acquisition of Quantum Circuits, enhancing its position in the gate-model quantum technology sector [2] - The company has secured multiple new deals for its Advantage2 quantum annealing system, indicating a commitment to its dual-tech approach, which differentiates it from competitors [2] - A renewed focus on defense sector applications may provide new client opportunities and projects for D-Wave [2] Group 2 - Despite these advancements, D-Wave's shares have declined by 30% year-to-date, reflecting a broader selloff in the quantum industry [3] - Quantum Computing Inc. has experienced a smaller decline in share price compared to D-Wave and other rivals, suggesting it may have distinguishing factors worth noting [3][6] - Quantum Computing Inc. has a Moderate Buy rating from analysts, with expectations for its shares to potentially rise by 112% to $18 per share, although its revenue remains low at $384,000 for the last quarter [4][5]

Group 1: Company Performance - D-Wave Quantum has experienced a significant revenue increase, doubling its revenue in Q3 2025 to $3.7 million, with a consensus estimate of $25.6 million for the entire year [4] - The projected revenue for 2026 is nearly $43 million, representing a 68% increase from 2025 [4] - Despite rising sales, D-Wave is expected to continue facing substantial losses, with a net loss of $140 million in Q3 compared to sales of $3.7 million [6] Group 2: Share Price and Market Sentiment - D-Wave's share price has surged 255% over the past year but is predicted to decline due to a broader trend of investors moving away from riskier stocks [1][8] - The company's stock has already decreased by 35% over the past three months, influenced by investor concerns over geopolitical instability and economic conditions [8][9] - D-Wave's price-to-sales (P/S) ratio stands at 237, significantly higher than the tech sector average of 8, indicating that the stock may be overvalued [11]

Core Insights - The first-mover advantage for pure-play quantum computing stocks may be short-lived as competition increases from larger tech companies [1][16] - Quantum computing represents a significant global economic opportunity, estimated to create between $450 billion and $850 billion by 2040 [5][6] - Despite impressive stock rallies, the commercialization of quantum computing is still in its early stages, with risks of overestimation of adoption and optimization [12][11] Company Performance - As of mid-October, stocks of IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. have seen increases of up to 6,200% over the past year [2] - These companies have been buoyed by practical applications of quantum technology and partnerships with major clients [6][8] - JPMorgan Chase's $1.5 trillion Security and Resiliency Initiative includes quantum computing as a key investment area, signaling potential growth [9] Market Dynamics - Quantum computing is projected to be a $850 billion market, though it cannot match the multitrillion-dollar market of AI [5] - Major tech companies, referred to as the "Magnificent Seven," are investing heavily in AI and are likely to extend their reach into quantum computing [17][19] - The entry barrier for quantum computing is relatively low, allowing larger companies to potentially overshadow pure-play stocks [16][19] Risks and Challenges - The commercialization of quantum computing is still nascent, with widespread adoption not yet realized [12] - Share-based dilution is a significant risk, as these companies have collectively issued over $4.1 billion in stock to raise capital [13] - The competitive landscape is shifting, with larger companies already making strides in quantum technology, posing a threat to the longevity of pure-play stocks [18][19]

Core Viewpoint - The article summarizes significant rating changes from Wall Street, highlighting companies with upgraded, downgraded, and newly initiated ratings, which are crucial for investors to consider. Upgraded Ratings - Shopify (SHOP) upgraded from Hold to Buy by Cowen Group with a target price of $159, citing valuation advantages as the stock has dropped 30% this year and strong quarterly performance provides an attractive entry point [2] - BorgWarner (BWA) upgraded from Hold to Buy by Deutsche Bank, with the target price raised from $46 to $82, noting the company's critical transformation into the AI data center market [2] - Analog Devices (ADI) upgraded from Equal Weight to Overweight by Barclays, with the target price increased from $315 to $375, emphasizing its high industrial business share in the analog chip sector [2] - MercadoLibre (MELI) upgraded from Neutral to Overweight by JPMorgan, with the target price raised from $2650 to $2800, due to more attractive valuations following recent stock price weakness [2] - Fastly (FSLY) upgraded from Market Perform to Outperform by William Blair, with no target price set, highlighting exceptional quarterly performance driven by increased AI traffic contributions [2] Downgraded Ratings - Coinbase (COIN) downgraded from Buy to Sell by Monness Crespi, with a target price of $120, as the firm revised down earnings forecasts ahead of its quarterly report, deeming previous assumptions about a steady recovery in cryptocurrency by 2026 as overly optimistic [3] - Kraft Heinz (KHC) downgraded from Neutral to Underweight by JPMorgan, with the target price lowered from $24 to $22, despite exceeding fourth-quarter expectations, as 2026 organic sales and profit outlooks fall short of market expectations [3] - Icon (ICLR) downgraded from Neutral to Underperform by Bank of America, with a significant target price cut from $195 to $75, due to an internal investigation revealing potential revenue inflation [3] - Inspire Medical (INSP) downgraded from Overweight to Equal Weight by Wells Fargo, with the target price reduced from $145 to $70, citing uncertainties in reimbursement policies affecting stock prices [4] - Humana (HUM) downgraded from Outperform to Market Perform by Royal Bank of Canada, with the target price lowered from $322 to $189, as the risk-reward balance has become neutral following strong growth amid reimbursement policy uncertainties [4] Initiated Coverage - Microchip Technology (MCHP) initiated coverage with a Neutral rating and a target price of $80 by Barclays, noting risks of market share loss in the microcontroller sector [5] - ON Semiconductor (ON) initiated coverage with a Neutral rating and a target price of $75 by Barclays, highlighting high exposure to the Chinese market and automotive sector as a suppressive factor [5] - Sterling Infrastructure (STRL) initiated coverage with a Buy rating and a target price of $486 by Stifel, as the largest earthmoving contractor in the U.S. is expected to benefit from long-term growth themes [5] - D-Wave Quantum (QBTS) initiated coverage with a Buy rating and no target price set by Cowen Group, citing the company's leading position in quantum annealing driving growth and high margins [5] - Immunome (IMNM) initiated coverage with a Buy rating and a target price of $40 by H.C. Wainwright, as the company builds a differentiated pipeline in oncology with significant advantages in solid and hematologic tumors [5]

Core Insights - D-Wave Quantum Inc. (NYSE: QBTS) is recognized as a strong buy tech stock, with a recent price target increase from Canaccord to $43, reflecting confidence in its leadership in quantum annealing and potential in error-corrected superconducting gate model systems [1][5]. Group 1: Company Developments - D-Wave Quantum Inc. announced a $10 million, two-year enterprise quantum computing as a service agreement with a Fortune 100 company, focusing on the development and deployment of multiple quantum-powered applications [2]. - The company specializes in commercial quantum systems, software, and cloud services aimed at real-world optimization, AI, and research problems, utilizing both annealing and gate-model technologies [3]. Group 2: Market Position and Outlook - Canaccord's report highlights D-Wave's leadership in quantum annealing as a key factor supporting its upside potential in the market [5].