Shares of D-Wave Quantum Inc. QBTS climbed over 18% after the company reported mixed results in its fourth-quarter 2024 earnings report. Revenue of $2.3 million beat expectations of $2.2 million. However, negative earnings per share of eight cents was worse than the negative six cents analysts were expecting. 

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The reason for the stock’s surge came the day before earnings as D-Wave Quantum announced that it had achieved “quantum supremacy” versus traditional computers. The company’s Advantage2 system, with its quantum annealing chip, solved a magnetic materials simulation problem related to materials discovery in 20 minutes. According to D-Wave, it would take one of the world’s most powerful supercomputers nearly one million years to solve the same problem.

Alan Barrett, chief executive officer (CEO) of D-Wave, called the achievement the “holy grail for quantum computing.” Barrett remarked that within the industry, there’s confusion around terms such as quantum supremacy versus quantum advantage or quantum utility. However, in this case, Barrett notes this is a demonstration of true quantum supremacy that has not been previously achieved

That announcement, along with encouraging forward revenue guidance from D-Wave, caused an initial surge in other quantum computing stocks. Rigetti Computing RGTI was up 13%, and IonQ Inc. IONQ was up about 10%. However, as the trading session moved into midday, those gains disappeared as investors continued to lose their appetite for technology stocks.

Still, the announcement may potentially help the quantum computing sector recover from the sell-off that occurred after NVIDIA Corp. NVDA Jensen Huang suggested in January that it would be at least 20 years before quantum computing would become “very useful.”

D-Wave Quantum Projects $10 Million in Quarterly Revenue

One major announcement from D-Wave Quantum’s earnings was its projection of $10 million in revenue for the current quarter—nearly four times the previous quarter and surpassing its total 2024 revenue of $8.8 million.

However, a key driver of this surge is the sale of a D-Wave Advantage quantum computer. While significant, it’s not the kind of recurring revenue investors can count on for the full year.

What's more encouraging is that the company announced record bookings of $23.9 million for the full year. That’s an increase of 128% from the $13.4 million in bookings the company posted in 2023. D-Wave also reported a consolidated cash balance of over $300 million.

Have a Game Plan for a Potential Short Squeeze

One reason QBTS stock is soaring is the 21% short interest heading into earnings. In fact, investors have increased their short positions by 23% in the 30 days before earnings. That could fuel a short squeeze as traders have to cover their short positions.

In midday trading, it doesn’t appear that there’s enough volume to force a squeeze. However, traders should note that QBTS stock began its recent bounce right at its 100-day simple moving average (SMA). And as of this writing, it’s crossed over its 50-day SMA as well.

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It’s important to note that traders drive short squeezes. They can be difficult for even experienced traders to navigate. Therefore, if you’re committed to D-Wave Quantum as a long-term stock, it’s time to have a game plan.

Even after a sell-off of more than 30% to start 2025, the stock is up more than 160% in the last 12 months. That’s an impressive gain, and almost all of it has come since November 2024. If the stock continues to climb over $7 per share, it may be a good idea to take some profits.

Why the caution? For all its promise, D-Wave Quantum is not profitable and is not likely to be profitable for some time. Investors are concerned enough about the valuations of profitable companies. They are beginning to have little patience for companies that have yet to show a profit.

D-Wave may be making the case for quantum supremacy in the realm of physics. But as a sector for investors, the battle for supremacy is ongoing. QBTS stock is a promising name, but it’s one of many for investors to watch.

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The article "D-Wave Quantum Stock Jumps on "Quantum Supremacy" News" first appeared on MarketBeat.