Quantum Companies Are Selling Stock. What It Means for D-Wave and Peers.

D-Wave Quantum made its Advantage2 system generally available on May 2, 2025. (COURTESY D-WAVE QUANTUM)

D-Wave Quantum said Tuesday that it had completed a $400 million at-the-market equity offering, making it the latest quantum-computing company to sell its own stock amid a flurry of interest in the technology.

It wasn’t a first for the company, as D-Wave completed a $150 million ATM program in January. But the offering comes at a time when competitors are taking similar steps to build up working capital.

Just last week, Quantum Computing announced the completion of a $200 million private placement of common stock, bringing its total cash position to more than $350 million. And on June 11, Rigetti Computing said it completed a $350 million ATM equity offering. The additional funding brought Rigetti to $575 million in cash, cash equivalents, and available-for-sale investments with no debt.

An optimist might argue that D-Wave and peers are showing their commitment to investing in and improving their technology with interest in quantum computing at a record high. But the influx of capital raises also serves as a pressing reminder that quantum is in its infancy. The technology has yet to be deployed on a broader scale. While D-Wave has paying customers, sales are lumpy, and to date, no pure-play company has managed to turn a profit.

Shares remain volatile. D-Wave stock has soared 77% so far in 2025, and shares of Quantum Computing are about 9% higher, but Rigetti stock has dropped 26%, while the S&P 500 has logged a moderate 5.2% gain.

D-Wave made its latest Advantage2 system generally available at the end of May. In an interview with Barron’s at the time, CEO Alan Baratz said the company was “excited about the prospects” for Advantage3, which is set to be released sometime in 2028. D-Wave is working to increase connectivity and coherence between qubits, the basic units of information in a quantum machine, to minimize the loss of information to the environment.

“Now we’re really going to start doubling down on increasing the qubit count as we go to multi-chip solutions,” Baratz said. “We’re still years away from that but we’ve got this track record of delivering generation after generation of increasingly powerful quantum computers.”

There are different approaches to scaling up quantum computers. Increased qubit count generally correlates to an higher incidence of errors, which is possibly the biggest factor hindering the wide-scale deployment of quantum machines.

D-Wave favors adding multiple chips to a system, each with a certain amount of qubits, rather than adding more qubits to a single chip. International Business Machines, meanwhile, is focusing on the development of built-in error correction. The storied tech firm plans to deploy the world’s first “fault-tolerant” quantum machine by 2029.

Companies operating in the space are increasingly confident about the potential for commercially viable systems by the end of the decade. Their optimism is infectious. Consulting firm McKinsey noted in its latest Quantum Technology Monitor that “investment is surging and breakthroughs are multiplying.”

Private and public investors alike believe quantum start-ups will generate “measurable value,” the firm said. In 2024, investors poured nearly $2 billion into start-ups worldwide, up from $1.3 billion in the prior year. Honeywell-owned Quantinuum and a late-stage start-up called PsiQuantum received half of total investment last year, “underscoring investors’ confidence that mature, established start-ups will continue to grow.”

McKinsey thinks the quantum-computing industry could be valued in a range from $28 billion to $72 billion by 2035. Including related technologies such as quantum communication and quantum sensing, the firm projects the entire market could be worth $198 billion by 2040.

In short, “growth shows no signs of slowing,” McKinsey wrote. With momentum in investments gaining, it’s time to strap in for the ride.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com