A Closer Look at D-Wave's Big Gains in September: More in Store?

Key Points

• D-Wave Quantum is one of the most-hyped—and potentially most overvalued—companies in the fast-growing quantum space.
• The price of shares surged by more than two-thirds in September alone thanks to the Fed's rate cut and the possibility of good news at the regulatory level, among other factors.
• Short interest in QBTS has also climbed significantly, and investors would do well to keep the hype surrounding quantum separate from their considerations of fundamentals for any of these firms.

D-Wave Quantum Inc. NYSE: QBTS has presented an interesting share price trajectory throughout the first three quarters of 2025. Dipping early in the year and remaining flat for several months, shares climbed in May but leveled off for most of the summer. 

Then, in the last month, the price of QBTS increased by an impressive 68%. Investors are likely wondering why shares of one of the hottest quantum computing names available now are moving in fits and starts, with fairly long periods of mostly horizontal trading.

While it's not always possible to pinpoint the exact drivers of share price spikes, there are a number of potential factors at play in D-Wave's latest rally—action by the Federal Reserve, the expectation of a push toward quantum tech development at the federal level, and even a major win for rival Rigetti Computing NASDAQ: RGTI all likely played a role. What's less clear, however, is how far elements like these can continue to boost a firm's stock with more than $9 billion in market value but revenues for the latest quarter of only $3 million.

Catalysts for September Price Movement

Despite some critique by short sellers, D-Wave's tech has positioned it solidly compared to many of its rivals, and its Advantage2 system in particular has been a standout. There have been minimal public developments in that area in the last several weeks, suggesting that the company's latest price surge is unrelated.

Perhaps the most likely driver of the rally for QBTS was the Fed's announcement of an interest rate reduction on Sept. 17, the first such cut of 2025. Though that news wasn't surprising for most investors, Chair Jerome Powell's remarks suggesting two further rate cuts this year helped to confirm an environment favorable to growth stocks like D-Wave.

A White House memo identified AI and quantum as two top priority areas for the coming quarters, suggesting that supportive measures for these industries may continue to emerge at a national level.

Also, last month, Rigetti—one of D-Wave's most prominent rivals—announced a major three-year contract with the Air Force Research Laboratory to develop quantum networking.

This is not the only competitor to see a major win in the past several weeks, and it could be that the quantum industry is still in an early enough stage that a bit of company-specific positive news is sufficient to provide a boost across most of the space.

Is It Likely More Gains Are on the Way?

While D-Wave's gains have been impressive, investors should remember that much of this momentum is driven by speculation. Indeed, without consistent profitability and with an astronomical price-to-sales ratio of more than 1,034, one would be hard-pressed to argue that D-Wave is in any way approaching undervalued.

The hype may largely be due to generalized optimism about quantum computing, which could continue to grow as concerns about a possible AI bubble also continue to mount. However, even the major tech firms that have entered the quantum race have not yet achieved the technological breakthroughs necessary to make quantum both broadly affordable and accessible to a retail market. 

While analysts seem to agree that this will most likely be the eventual outcome for the quantum industry, it remains to be seen when that achievement may take place as well as which companies might benefit the most.

While bullish investors have poured money into QBTS stock, particularly in the last month, others are sensing an opportunity in the other direction: short interest in D-Wave has also surged, climbing about 10% over the same period. Under 43% of QBTS shares are owned by institutional investors; zealous retail investors are primarily responsible for the company's ascent.

This may explain why Wall Street analysts are uniformly positive about D-Wave—all 11 analysts rating the firm have assigned a Buy. They have also set a consensus price target nearly a quarter below the current level, suggesting sizable downside potential. 

Investors would do well to stay cautious about D-Wave, although if the market receives more good news, additional rallies are also possible.