Quantum Computing Update: D-Wave and Microsoft
D-Wave Quantum reported a remarkable 1,120% surge in bookings, totaling $36 million for Q2, 2023. Despite this increase, actual revenue for the same period was only $3 million, raising concerns over the company’s profitability as it relies heavily on large contracts. Major client AT&T plans to expand its usage of D-Wave’s quantum computers for optimization challenges within its operations. However, D-Wave’s stock trades at a price-to-sales ratio of 610, significantly higher than the tech sector average of 8, highlighting potential risks for investors.
In contrast, Microsoft, noted for its strong profitability and robust cash flow, continues to advance in quantum computing. Its Azure cloud platform surpassed $100 billion in annual sales as of June 30, 2023, with the potential for integrating quantum services. Microsoft reported $4.74 in earnings per share for fiscal Q4 and maintains a price-to-earnings ratio of 27, below the sector average of 36, positioning it favorably in the quantum computing landscape amid growing competition.
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