Government Contracts Fuel a Surge in D-Wave Quantum’s Stock

Shares of D-Wave Quantum have staged a remarkable recovery, climbing more than 50% from their November lows. This rally is underpinned by a strategic corporate pivot toward securing government contracts, coupled with fresh analyst coverage that has injected renewed optimism into the market.

The company's third-quarter results for fiscal 2025 highlighted its accelerating momentum. Revenue doubled year-over-year to $3.7 million, surpassing consensus estimates by nearly 20%. Bookings saw an impressive sequential jump of 80%, reaching $2.4 million.

Perhaps most notably, D-Wave concluded the quarter with a record cash position of $836.2 million, a dramatic increase from the $29.3 million held a year earlier. This substantial war chest provides significant runway for continued technology development and market expansion.

Market sentiment appears broadly positive. Among twelve analysts tracked, ten recommend the stock as a "Strong Buy," one suggests a "Moderate Buy," and one advises "Hold." The average price target stands at $37.82, implying an upside of approximately 39% from current levels, with a high target of $48 per share.

A Strategic Shift Toward Public Sector Work

A key driver behind the recent share price appreciation was the December 2, 2025, announcement of a dedicated business unit focused on U.S. government contracts. The stock responded with an immediate gain of about 5% on the day of the news, followed by further advances of 11.5% and 14.6% in subsequent sessions.

Should investors sell immediately? Or is it worth buying D-Wave Quantum?

The new division will be led by Jack Sears Jr., an executive with deep experience in the public sector. CEO Alan Baratz emphasized the strategic importance of the move, stating that "the call for quantum technologies to address national interests is growing louder." The company's proprietary Advantage2 quantum system is now being positioned for applications in national security, defense, and critical infrastructure.

Analyst Coverage Provides Additional Catalyst

Adding fuel to the rally, Evercore ISI initiated coverage on D-Wave Quantum. Analyst Mark Lipacis assigned an "Outperform" rating alongside a $44 price target. This target suggests a potential upside of roughly 60% from the recent trading level near $28.

Lipacis highlighted D-Wave's role as a leader in the quantum computing field, noting the company's solid financial footing and strategic positioning for a potential technological breakthrough. The optimism echoes broader sector enthusiasm; analysts at Bank of America recently described quantum computing as potentially "the biggest breakthrough for humanity since the discovery of fire."

High Volatility Remains a Sector Hallmark

Despite the strong performance, which has seen the stock surge over 220% year-to-date, extreme volatility remains a defining characteristic. Shares pulled back 6% on December 5, following a multi-day rally, illustrating the unpredictable trading patterns. The 52-week range of $3.71 to $46.75 underscores the highly speculative nature of the quantum computing sector.

This speculation is further reflected in the valuation, with the stock trading at a price-to-sales ratio of approximately 395, indicating that investors are pricing in significant long-term growth expectations.