D-Wave Quantum: Washington's Exit Door Opens as the Market Keeps Its Distance

D-Wave shares are down 35% year-to-date even as the company finalizes a CHIPS Act award and registers 7.1 million shares for potential resale by the Commerce Department.

D-Wave Quantum has spent recent weeks stacking up announcements that, on paper, ought to have investors reaching for the buy button. Instead, the quantum computing specialist's shares are nursing a 35% year-to-date decline, and the gap between headline flow and price action has become the story in itself.

The stock changed hands at EUR 14.67 on Friday, up 1.8% on the day but still firmly in the red over the past month. That modest gain matches precisely the advance booked since the company finalized its funding agreement with the US Department of Commerce — a muted response to a deal of considerable size.

A prospectus filing that puts seven million shares in play

The latest twist came Thursday, when D-Wave lodged a prospectus supplement with the US securities regulator permitting the Department of Commerce to resell 7,095,721 common shares. The filing was made under a Form S-3ASR registration and shepherded by law firm Paul, Weiss. Not a single cent of any eventual proceeds would flow to D-Wave: no new stock is being issued, and no sale has taken place so far.

The holding itself traces back to the freshly completed CHIPS Act award, under which Washington committed up to USD 100 million and received a minority stake carrying no control rights in return. That development had already stirred the shares a day earlier, leaving them up 0.9% since. Thursday's paperwork is simply the mechanical consequence — the government cannot liquidate its position unless the securities are registered first. No immediate selling pressure follows automatically, yet investors should be aware that a potential offering of just over seven million shares now sits in the market, ready to move should the department choose to head for the exit.

What the CHIPS money is meant to build

Signed on Tuesday, the definitive agreement directs the funding toward two ambitious hardware targets: an annealing system scaled to 100,000 qubits, and a gate-model system of 10,000 qubits designed to deliver 100 logical qubits capable of executing more than one million operations. D-Wave is one of three recipients — alongside Rigetti and Quantinuum — sharing a USD 300 million research and development grant package.

Competition for the broader funding pool is fierce. Rigetti and Quantinuum each secured up to USD 100 million, while GlobalFoundries locked in as much as USD 375 million for its newly formed Quantum Technology Solutions arm. Across nine quantum firms, more than USD 2 billion in support has now been allocated. The Motley Fool's editorial team reads D-Wave's slice as aimed chiefly at supply chain and manufacturing scale-up, with Rigetti focused on cooling technology and chip connectivity, and Quantinuum pursuing US manufacturing partnerships.

Valuation checks flash mostly red

While the CHIPS money shores up the balance sheet, D-Wave's valuation is drawing fresh scrutiny. By Simply Wall St's reckoning, only one of six common valuation screens comes back positive. The price-to-book ratio sits near 5.9, against roughly 3.0 for the wider software sector — though well below the approximately 11.8 commanded by comparable quantum computing rivals. Ongoing investigations into past company statements add another layer of uncertainty. After a powerful three-year run in the share price, many observers now regard the stock as richly valued.

The technical picture offers little comfort either. At a pre-market EUR 14.54, following Thursday's EUR 14.41 close, the shares remain well beneath their 50-day moving average of EUR 16.21 and about 64% below the 52-week high of EUR 40.41 set last October. Against the recent annual low of EUR 11.12 touched at the end of March, there is a 31% cushion to the upside.

Management change and a commercial win

Roughly a week ago, D-Wave disclosed that finance chief John Markovich would step down effective September 2. The company said his departure was not prompted by disagreements over management, operations or financial reporting. Greg Golkov, senior vice president of finance, takes over as acting CFO on an interim basis. Golkov brings more than 25 years of finance and accounting experience and has led accounting, SEC reporting, financial planning, treasury and tax at D-Wave since May 2023. The shares have added 3.1% since that announcement.

Further back, in mid-August, Japanese carrier NTT Docomo confirmed it had moved a second quantum application built on D-Wave technology into production. The application cut location registration signals during peak hours by 65.3% and paging signals by 7.0%, easing network load and lifting operational efficiency. The result underscores that D-Wave is putting commercial systems to work in telecoms, well beyond the realm of pure research.

A cautionary counterpoint

The path to commercialization remains treacherous, as NEC's retreat illustrates. The Japanese conglomerate halted its own quantum computer development, concluding that more than a decade of further investment would be required and that monetization looked too difficult. For D-Wave — which, unlike NEC, already sells commercial systems and now enjoys state backing — the contrast highlights both its unusual position and the pressure investors are likely to apply when it comes to actually deploying the grant money.

Despite the steady drumbeat of positive news on funding policy, customer relationships and operations, the stock is down 35% since the start of the year and 18% over the past 30 days. August's quarterly results, which featured a sharp jump in bookings, likewise failed to provide lasting support — a 7.0% decline has accumulated since. The disconnect suggests investors are weighing each announcement in isolation rather than reading them as confirmation of a broader growth narrative.