D-Wave Quantum Stock Shows Strong Momentum Amid Overbought Signals and Fundamental Concerns

Technical Analysis

D-Wave Quantum Inc. (QBTS) closed at $17.82 on June 4, 2025, up 0.79%. The stock has shown strong momentum, trading near its recent high of $18.20 and well above its 50-day ($9.87) and 200-day ($5.35) moving averages, indicating a sustained uptrend. The RSI at 73 signals overbought territory, suggesting potential short-term consolidation or pullback. The MACD (3.72) confirms strong positive momentum. Average True Range (ATR) is elevated at 9.17, implying significant intraday volatility. Support sits at $17.55, with resistance at $18.80. The 1-day trading volume was below average, which may limit near-term directional conviction. The stop-loss level near $17.00 offers a defined risk threshold.

For the next trading day (June 5), technical indicators imply a likely continuation of bullish pressure, but with RSI bordering overbought, an intraday retreat or sideways movement is plausible. Over the upcoming week, sustained volume recovery above average and a break above the $18.80 resistance would validate renewed upside targeting the yearly high of $19.77. Otherwise, a short-term pullback to the $17.50 support zone could occur as the market digests recent gains.

Fundamental Analysis

QBTS’s trailing twelve months earnings per share (EPS) of -$0.66 highlights ongoing unprofitability, with a negative price-to-earnings ratio (-27) reflecting losses. The discounted cash flow (DCF) valuation is negative (-$0.29), indicating the company’s current intrinsic value, based solely on cash flow projections, remains below current market prices. However, D-Wave’s technology breakthrough with the Advantage2 system, asserting real-world quantum supremacy, suggests a disruptive growth catalyst that may eventually justify elevated valuations. Institutional interest, exemplified by major pension fund purchases, demonstrates confidence in the company’s fundamental prospects and potential market leadership in quantum computing.

Consensus analyst targets remain conservative with a median price target around $2.50 and a range of $2.00–$4.00, reflecting skepticism from traditional valuation methodologies despite the surge in share price. Analyst sentiment is uniformly positive, with all coverage recommending a “Buy” stance post-breakthrough despite the fundamental disconnect. Earnings disclosure is pending on August 14, 2025, a potential catalyst for repricing based on financial results and guidance.

Intrinsic Value and Long-Term Investment Potential

Intrinsic value assessments via traditional discounted cash flow models do not currently support the elevated share price, indicating that QBTS is trading primarily on growth prospects and technological potential rather than fundamentals. The company’s pioneering quantum computing technology and early lead in real-world applications position it for long-term industry dominance if commercialization and scaling are successful. In a sector characterized by high R&D costs and uncertain timelines, this introduces significant execution risk alongside substantial upside. Given the nascent stage of quantum computing adoption and the company’s negative earnings, the stock’s intrinsic value may not be realized for several years as revenue scales and profits materialize.

Long-term potential hinges on sustained innovation, market expansion, and the company’s ability to transform breakthroughs into enterprise adoption and recurring revenues. Investor patience and risk tolerance toward volatile growth tech stocks will influence returns over this horizon.

Overall Evaluation

QBTS currently exhibits strong technical momentum following a transformative technological milestone, albeit with fundamental valuations out of alignment, reflecting high expectations priced in by the market. Near-term price action could be volatile due to elevated RSI and a potential pullback from overbought levels. The stock’s extraordinary recent gains have attracted significant institutional interest but remain vulnerable to profit-taking and timing risk ahead of the next earnings report.

Categorized as a Buy candidate based on momentum and growth potential rather than current fundamental valuation, the stock merits attention for those seeking exposure to cutting-edge quantum computing technology with a long horizon. Prudent risk control with adherence to support and stop-loss levels will be critical in managing downside exposure amid elevated volatility.