D-Wave Quantum (QBTS) closed at $29.40 on Friday, capping a week of dramatic gains as the U.S. Commerce Department included the company in a new round of proposed CHIPS and Science Act funding. The stock rose 14.22% on Friday alone, following a 33.37% jump on Thursday, for a total weekly advance of 44.5%.
Federal Support for Quantum Computing
The Commerce Department announced letters of intent for $2.013 billion in planned incentives with nine firms, marking a significant expansion of the CHIPS program into quantum computing. D-Wave is in line for $100 million to support its annealing and gate-model superconducting quantum systems. Annealing technology focuses on optimization problems, while gate-model machines represent the general-purpose quantum approach pursued by many companies.
CEO Alan Baratz called the proposed award a "transformative moment" for D-Wave and the broader quantum sector. Commerce Secretary Howard Lutnick said the investments would create "high-paying American jobs." Bill Frauenhofer, executive director of Semiconductor Investment and Innovation, noted the program uses a "portfolio approach" spanning multiple quantum technologies.
Market Context and Broader Rally
The rally in D-Wave shares tracked a strong week for U.S. equities. The Dow Jones Industrial Average closed at an all-time high on Friday, and the S&P 500 posted its eighth consecutive weekly gain. Investors found relief in progress on Middle East diplomacy and a solid corporate earnings season. U.S. markets will be closed Monday, May 25, for Memorial Day, giving traders time to digest the two-day surge before trading resumes Tuesday.
In related news, IBM was awarded $1 billion for a quantum-chip joint venture named Anderon, with GlobalFoundries receiving $375 million for quantum components and Rigetti Computing set to get about $100 million, according to Reuters.
Financial Performance and Outlook
D-Wave reported first-quarter revenue of $2.9 million, down 81% from the same period last year. However, bookings surged nearly 2,000% to $33.4 million, reflecting strong demand for its quantum solutions. The company's net loss widened to $18.4 million, or 5 cents per share. Investors appear to be focusing on the order pipeline and government backing rather than current revenue.
The company faces a busy week ahead. Executives will speak at TD Cowen's technology conference in New York on May 28, followed by D-Wave's first investor day on June 1 at the NYSE. Management plans to discuss strategy, product roadmap, commercial momentum, and growth plans.
Risks and Considerations
The bear case remains clear. The funding award is not finalized; D-Wave has stated that the deal is subject to completion of key documents, and the Commerce Department could pause or terminate negotiations. Milestone requirements may not be met, and the issuance of $100 million in common stock to the government could dilute existing shareholders. If investor focus shifts back to revenue, cash burn, or execution risk, the same thin-float dynamics that propelled the stock higher could trigger a sharp decline.
