Quantum Computing Stocks Surge: Is the Rally Here to Stay?

The quantum computing sector has exploded in 2025, with stocks like D-Wave Quantum (QBTS) and IonQ (IONQ) surging over 1,200% and 400%, respectively, amid breakthroughs in hardware, partnerships, and real-world applications. But is this a sustainable shift or another fleeting tech rally? The answer lies in parsing the interplay of technological milestones, institutional adoption, and valuation fundamentals.

The Technological Catalyst: Quantum Supremacy Goes Practical

The sector's momentum is anchored in tangible progress toward quantum supremacy—the point where quantum computers outperform classical systems on specific tasks. D-Wave's 2025 milestone stands out: its 1,200-qubit Advantage2 prototype solved a magnetic materials simulation in minutes—a problem requiring 1 million years on the world's fastest supercomputer, Frontier. This wasn't a theoretical exercise but a commercially valuable task, identifying optimal materials for sensors used in medical imaging and energy systems.

IonQ, meanwhile, has advanced its trapped-ion technology to over 100 qubits with improved error rates, while its Forte Enterprise modular systems aim to tackle complex problems like climate modeling. Both companies have also expanded their patent portfolios: IonQ now holds 950 patents, while D-Wave's Proof of Quantum Work (PoQW) model—designed to slash blockchain energy use—adds another revenue stream.

Market Sentiment and Institutional Momentum

Investor enthusiasm is fueled by concrete commercial deployments. D-Wave's systems are already in use by Ford Otosan (optimizing automotive manufacturing), NTT DOCOMO (network efficiency), and Japan Tobacco (drug discovery). IonQ's partnerships with cloud giants like AWS, Microsoft, and Google Cloud position it to serve enterprises seeking quantum solutions for logistics, finance, and AI.

The Zacks Investment Research's Buy ratings for both companies reflect this optimism. D-Wave's 2025 earnings are expected to grow 72% year-over-year, while IonQ's narrowed losses and $75–$95 million revenue guidance signal improving fundamentals.

Valuation: A Tale of Two Trajectories

While both stocks have soared, their valuations diverge. D-Wave's 240x price-to-sales ratio reflects its premium positioning as a leader in proven applications, with $304 million in cash and a 509% revenue jump in Q1 2025. IonQ trades at a more modest 213x P/S, offering better affordability despite its 40% stock surge.

Critics argue such high multiples are risky without near-term profitability. D-Wave's path to profitability remains undefined, while IonQ's narrow losses suggest progress. However, both companies are still burning cash—a reality that could test investor patience if revenue growth stalls.

Competitive Landscape and Risks

The quantum race is heating up. Competitors like IBM and Google are scaling qubit counts, while startups like PsiQuantum aim to disrupt with photonic systems. D-Wave and IonQ also face technical hurdles: qubit stability, error correction, and scaling to thousands of qubits needed for true “quantum advantage.”

Regulatory and adoption risks linger too. While industries like finance and pharma are exploring quantum applications, widespread adoption hinges on solving these technical barriers.

Investment Thesis: A Selective Play

The quantum sector is still in its infancy, but the risk-reward calculus tilts toward selective optimism.

• D-Wave is the practical play: Its quantum supremacy in real-world problems and Fortune 500 partnerships justify its premium valuation. Historically, buying QBTS five days before quarterly earnings and holding for 20 trading days from 2020 to 2025 yielded a 509% return, though the strategy carried significant risk with a maximum drawdown of -20.13%, volatility of 35.34%, and a Sharpe ratio of 1.57. Investors seeking near-term commercial traction and strong cash reserves should consider QBTS, despite its frothy multiple.
• IonQ offers long-term upside: Its scalable trapped-ion architecture and IP portfolio position it as a future leader in high-qubit systems, ideal for climate and AI applications. A similar strategy for IONQ delivered a 409.7% return over the same period, with lower volatility (21.78%), a maximum drawdown of -14.29%, and a Sharpe ratio of 0.86. Its lower valuation and cloud partnerships make it a better bet for those willing to wait for scalability breakthroughs.

Avoid chasing momentum without fundamentals. Quantum's transformative potential is undeniable, but execution will determine which companies survive the transition from lab to market.

Final Take

The quantum rally isn't fleeting—it's a tipping point. Firms like D-Wave and IonQ have crossed critical thresholds in both technology and commercialization. While risks remain, investors who pick the right companies now may secure stakes in the next wave of computing. Proceed with caution, but proceed.