D-Wave Quantum has seen a surge in its stock price this year after releasing its Advantage2 quantum computer, but revenue remains minimal. Quantum computing stocks like D-Wave may struggle to maintain high valuations in the future. Interest in quantum technology spiked in 2024 after Alphabet’s milestone with its Willow quantum chip.

D-Wave has shown impressive revenue growth and technology progress, with third-quarter revenue doubling to $3.7 million. The company specializes in quantum annealing technology and launched Advantage2, its sixth-generation quantum computer. Despite losses, D-Wave is well-capitalized with $836.2 million in cash.

Investors should temper expectations for D-Wave next year as it continues to invest in research and development. The company reported an operating loss of $27.7 million in Q3 and negative free cash flow of $55.8 million year-to-date. Its price-to-sales ratio is over 300, making it a high-risk stock.

D-Wave’s market cap has reached $8.1 billion, but its full-year revenue forecast is just $25.5 million. The company, along with other quantum computing peers, is not expected to generate profits for years. Despite progress, it may take time for the stock to see significant gains.

Consider the risks before investing in D-Wave Quantum, as it remains a high-risk stock with a significant price-to-sales ratio. Quantum computing is a promising sector, but patience may be needed due to the current financial picture. The Motley Fool’s Stock Advisor team has identified 10 other stocks with potential for significant returns.

Read more at Nasdaq: Where Will D-Wave Quantum Be in 1 Year?