Washington Takes an Equity Stake in D-Wave Quantum as $100 Million CHIPS Act Bet Triggers a Surge

D-Wave jumps 28% on $100M government funding deal with equity stake, but faces dilution risk and non-binding terms as revenue plummets.

The U.S. government is not just handing out grants—it is buying shares. D-Wave Quantum has signed a letter of intent with the Department of Commerce for $100 million in funding under the CHIPS and Science Act, with the government receiving a non-voting minority equity stake in return. The news sent D-Wave shares sharply higher on Thursday, with gains of up to 28% pushing the stock to around €21.20. Earlier in the session, the stock had already jumped 16.7% to €19.39, reflecting the market’s immediate appetite for the deal.

The $100 million commitment is part of a broader $2 billion initiative spread across nine quantum computing companies. IBM secured the largest slice at $1 billion, while Rigetti Computing and Infleqtion each received $100 million, matching D-Wave’s allocation. The funds are earmarked for a new research center in Boca Raton, Florida, and for expanding existing labs in New Haven, Connecticut, and Burnaby, British Columbia.

D-Wave plans to use the capital to build an annealing system boasting 100,000 qubits alongside a gate-model system with 10,000 physical qubits—equivalent to roughly 100 logical qubits—targeting applications in quantum chemistry and quantum artificial intelligence. Chief Executive Alan Baratz described the arrangement as a “transformative moment,” underscoring the government’s recognition of quantum computing as strategically vital for the domestic supply chain.

The stock move, however, comes with caveats. The letter of intent is not a binding contract; final documentation must be signed before the money flows. Once it does, D-Wave will issue $100 million worth of shares to the Commerce Department, creating a dilution risk for existing stockholders—a risk the company itself has flagged. Despite the rally, the stock still trades roughly 45% below its 52-week high of €38.48 set in October 2025.

The financial picture is as complex as the technology. D-Wave’s first-quarter revenue plummeted 80.9% year-on-year to $2.86 million, falling short of the $4.19 million consensus. Yet the company booked a record $33.4 million in new orders—more than the total bookings of 2024 and 2025 combined. The surge was driven by a $20 million system sale to Florida Atlantic University and a $10 million QCaaS contract with a Fortune-100 company. Management responded by raising its annual guidance from one system sale to two or three, while the cash position stood at a healthy $588.4 million, despite burning roughly $45 million in operating cash flow during the quarter.

Analysts remain largely bullish. Of 17 analysts tracked by S&P Global, 14 rate the stock a buy. The consensus price target stands at $34.67, with Cantor Fitzgerald holding at $40 and Northland Securities initiating coverage with a neutral rating and a $22 target. S&P’s broader pool of 15 analysts assigns a “Strong Buy” average and a $35.17 target, with recent individual targets ranging from $29 (Mizuho) to $43 (Rosenblatt). Needham, Cantor, and Canaccord Genuity see the stock at $40, $40, and $41, respectively.

All eyes now turn to June 1, when D-Wave will host its first-ever Investor Day at the New York Stock Exchange. The management team is expected to unveil details on the Advantage2 prototype and the integration of recently acquired Quantum Circuits Inc., alongside the broader technology roadmap and growth strategy. The event could well be the next catalyst for a stock that has already delivered a volatile ride in 2026.