D-Wave Quantum: Stifel and Rosenblatt Trim Targets While the Subscription Engine Takes Center Stage

Two analysts cut their price targets on D-Wave Quantum on the same day, and both kept their buy ratings intact. Stifel now sees $23 instead of $35; Rosenblatt moved to $30 from $43. The gap between the two targets remains wide, but the shared message is that the quantum computing company's long-term case still holds even as the path to dependable revenue looks less certain than it did.

Rosenblatt was explicit about the reasoning behind its trim: quarterly revenue is simply hard to forecast. The firm also pointed to shifted timing on machine sales and a slower ramp in cloud-delivered quantum computing. That combination matters more than any single revenue surprise, because at D-Wave the valuation hinges on when a system sale actually turns into recognized revenue.

A 21% Revenue Gain, With a Different Mix Underneath

The third-quarter 2026 results, published a day earlier, show revenue of $4.5 million, up 21% year over year. Bookings, by contrast, swung sharply. That divergence is why the quality of growth now matters more than its headline size.

The mix is shifting. Commercial customers accounted for 52% of revenue in the latest quarter, compared with 31% a year earlier — a sign of broader economic use, provided those applications turn into lasting customer relationships. The subscription line, which D-Wave calls QCaaS, brought in $2.2 million, a 56.4% increase. Services added another $2 million, up 317.8%.

Those two lines are the ones that could make the business more predictable. If subscriptions keep climbing and more customers run their applications on a sustained basis, D-Wave would lean less on individual system deliveries. Services can support deployments; the real test is whether they breed additional subscriptions and help cover running costs.

Bookings Up 611%, but One Contract Does the Heavy Lifting

The nine-month picture shows the scale of business already won: bookings of $37.4 million in the first nine months of 2026, a 611% jump over the prior-year period. That speaks to D-Wave's ability to land larger deals — if the revenue follows as planned. The system sale to Florida Atlantic University shapes the increase significantly, and the already-announced delivery and revenue recognition in the fourth quarter remains a key execution test.

Remaining performance obligations stood at $38.3 million at the end of September, with roughly 59% expected to be recognized as revenue within the next twelve months. That gives investors a firmer yardstick than the general promise of a growing quantum market. The sales pipeline, meanwhile, grew more than 75% quarter over quarter, and management expects growth across all four revenue lines in 2027.

Two Technologies, Two Timetables

D-Wave runs a twin-track strategy. Annealing systems target today's optimization problems; gate-model systems aim at fault-tolerant computing further out. The bridge between the two is where the opportunity sits — provided the current business improves commercial viability while the next technology step advances.

Concrete development milestones are in place. A dual-chip annealing processor for Advantage 3 has entered manufacturing, and D-Wave is developing on-chip qubit control for its gate-based offering. The CHIPS Act agreement opens access to up to $100 million in funding covering both approaches; in return, the U.S. government is to receive a non-controlling minority stake. Processor progress supports the valuation most when it turns into usable offerings and steadier revenue.

The Cost Line Is the Counterweight

Against any quick re-rating stands the earnings picture. Gross margin was 52.9%, down from 71.4% a year earlier. The adjusted EBITDA loss reached $37.7 million. Operating cash burn came to $109 million in the first nine months of 2026, versus $53.6 million in the same period a year earlier.

D-Wave still has a liquidity cushion, but how much that cushion matters depends on how fast added revenue absorbs the ongoing cash draw. Milestone-linked funding could reinforce it if the conditions are met. If personnel, development and operating expenses outpace the contribution from new customers, even a growing subscription book would only partly soften the financing need.

What the Fourth Quarter Has to Show

A $10 million, two-year contract with a Fortune-100 company includes an application already in production, according to the company. NTT DOCOMO reported 65% fewer daily peak registration signals and 7% fewer paging signals in a production application — a concrete proof point whose economic value to D-Wave rises if it leads to additional paid deployments.

The near-term test arrives in the fourth quarter of 2026, when management expects to deliver the Florida Atlantic University system — a $20 million contract — and recognize a substantial share of its revenue. Some installation and calibration revenue is expected in early 2027. Investors should watch both that delivery and the subscription trajectory. Only when large orders and recurring usage jointly cover costs would the economic foundation genuinely improve — and that is the question the trimmed targets are really asking.