Alan Baratz of D-Wave Quantum (David Fitzgerald/Getty Images)

D-Wave CEO says recent tech breakthrough is bolstering its sales momentum

D-Wave Quantum CEO Dr. Alan Baratz also believes the company has minimal risk from tariffs and is well insulated from any turbulence in the global economy.

Luke Kawa

5/8/25 2:49PM

D-Wave Quantum is one of the best-performing stocks listed across all US exchanges on Thursday, soaring over 50% at its peak after an impressive set of first-quarter results in which more quarterly revenues were generated than all of 2024.

(The Tradr 2x Long QBTS Daily ETF is performing like the name suggests, more than doubling on the day.)

We sat down with CEO Dr. Alan Baratz to discuss the company’s rising pipeline of potential new buyers for systems (which drove this quarter’s huge jump in revenues), how the firm is navigating a world of uncertain tariffs and rising recession risks, and how D-Wave’s opportunity set is expanding beyond solving business optimization problems to AI and the blockchain.

Below are lightly edited responses from Baratz on D-Wave’s operations and business prospects. All emphasis added.

On how the three potential systems sales highlighted in the March Q4 earnings call are progressing:

I think that I indicated when we last spoke that those three were in the very early stages, and these are long timeline sales opportunities, so it was going to take a while for them to mature. What I can tell you is that those three are all progressing nicely, one of them actually quite nicely. Although, nothing to report at this time. And then we have added a couple of others, so we are making progress. The fact that the supremacy result has really generated a lot of interest among the supercomputing centers, combined with the fact that Julich was the first to take the plunge and actually purchased a system, has generated some very real interest from other supercomputing centers and national labs in acquiring systems.

On D-Wave’s supply chain risk from tariffs:

The answer is low to nothing. Most of the technology that we use to build our systems is either commodity if acquired externally, or developed internally by our own R&D. So the parts we acquire externally are essentially commodity. Now, let’s take China for example. We do have some parts in our system that are sourced from China.

They are low-tech things like connectors and frankly represent less than 10% of the cost of the system. So even if we had to pay 2x, 3x, 4x for those parts, it really would not significantly impact us. So it’s just not an issue.

On if there’s any sign of potential customers pulling back in light of concerns about the macroeconomic environment:

No impact at all, but let me explain why. We are actually seeing now more, larger companies with more complex applications wanting to do larger deals with us. Now, that’s driven primarily by the supremacy work that has caught the attention of a lot of companies, namely the fact that we are able to deliver real computational capability that you cannot get classically — so the supremacy result combined with customer references and the fact that we have already been able to deliver value to a number of different companies. Quite the opposite of seeing challenges, we are actually seeing a growing pipeline of better opportunities.

But perhaps the other reason why this is the case is you talking about CapEx going down due to uncertainty. When we sell professional services and quantum compute as a service, it’s OpEx, not CapEx. Now, when we sell systems, that is CapEx, but that’s more sold to supercomputing centers and government labs that don’t have the same kind of issues that commercial may be having right now.

On D-Wave’s total addressable market:

Optimization is a huge market opportunity. IDC put the market for quantum at about $8 billion to $9 billion in roughly three years, and they also said that they think optimization is the killer app for quantum computing. So there’s a a huge market opportunity for us just in the optimization space, and we’re the only ones that can go after that today.

But we’ve also started talking about some new application areas that are enabled as a result of the supremacy work; for example, blockchain. We built a hashing function based on the computation that we use in our quantum supremacy result, which enables a much more energy efficient proof of work for blockchain and cryptocurrency.

Now, we are not blockchain or cryptocurrency experts. So we are looking for partners who are experts in the area who are interested in leveraging that technology, and we have already engaged with a few that have come to us with an interest in leveraging this technology. That’s a whole new market opportunity area for us that isn’t at all baked into any of our thinking about the growth of the business.

The second is AI. We’re doing some very interesting work in how you can use the quantum computer together with classical to do AI model training and inference faster and with less electricity consumption. And we think that could also be a significant market for us.

What’s interesting about those two, blockchain and AI, is that unlike optimization, where it’s really quantum compute as a service — because all these businesses care about is “run my application” — in those cases, they need systems. So those are system sales opportunities.

Matt Phillips60m

Oklo surges after receiving approval for next phase in the construction of its first reactor

Revenue-free retail favorite Oklo is up in early trading after announcing regulatory updates on its first product, a reactor it calls Aurora, which it has started building at the US Energy Department’s primary nuclear energy research and development center, the Idaho National Laboratory.

Oklo announced that it signed an “other transaction agreement” (OTA) with the Department of Energy early Tuesday. (OTAs are typically used by the federal government to enter into research, prototyping, and production deals with private entities outside of the typical procurement processes.)

Oklo also announced that the DOE’s Idaho Operations Office also signed off on a preliminary safety design review for the reactor, which is expected to be completed sometime in late 2027 or 2028. The company broke ground on the project in September.

Separately, Oklo also announced that the Nuclear Regulatory Commission issued a materials license enabling an Oklo subsidiary to handle, process, and distribute isotopes.

“This is Oklo’s first NRC-issued license and supports the transition from design and planning to real-world execution and progress,” the company said.

Given the close involvement of the federal government in the development of nuclear power plants, Oklo’s close ties to the Trump administration have been seen as an important advantage for the company — but have also drawn scrutiny and criticism.

Energy Secretary Chris Wright was formerly a board member at Oklo, before he was tapped to lead the Trump administration’s Department of Energy.

The department is playing a more prominent role in the nuclear regulatory process under an executive order designed to speed up approval of new nuclear energy technologies.

Separately, Oklo is due to report earnings after the close of trading on Tuesday.

Oklo Announces U.S. Department of Energy Approval for Nuclear Safety Design Agreement of Aurora Powerhouse at Idaho National Laboratory

Separately, Oklo also announced that the Nuclear Regulatory Commission issued a materials license enabling an Oklo subsidiary to handle, process, and distribute isotopes.

“This is Oklo’s first NRC-issued license and supports the transition from design and planning to real-world execution and progress,” the company said.

Energy Secretary Chris Wright was formerly a board member at Oklo, before he was tapped to lead the Trump administration’s Department of Energy.

The department is playing a more prominent role in the nuclear regulatory process under an executive order designed to speed up approval of new nuclear energy technologies.

Separately, Oklo is due to report earnings after the close of trading on Tuesday.

Luke Kawa

The emerging 2-tier system for moving oil through dangerous waters

The road less traveled, or the waters more mined.

J. Edward Moreno2h

Eli Lilly receives its only sell rating as HSBC downgrades, citing smaller market for weight-loss drugs

Eli Lilly slipped in early trading after analysts at HSBC gave the pharmaceutical darling at the center of the obesity drug boom a rare downgrade.

Analysts at the bank cut their rating to “reduce” from “hold.” They cut their price target to $850 from $1,070. The stock closed at $989 on Monday.

“We think Lilly shares are priced to perfection, are uncomfortable with working capital trends, and think medium-term earnings trends are optimistic,” the analysts said.

According to Bloomberg, this is the only sell rating on Lilly among the 38 analysts who cover the stock.

The company has rallied more than 20% in the past year as its obesity drug sales continue to rise, far outpacing its top rival, Novo Nordisk.

But the space is getting increasingly crowded with new entrants and new products from Lilly and Novo, putting downward pricing pressure on their products. HSBC noted that the emergence of cash-pay channels for their drugs makes them subject to economic cycles and seasonality.

And while the introduction of oral options has expanded the market, HSBC analysts said they think “the compliance and persistence of these drugs might disappoint.”

“Whilst the momentum in the launch might be positive, we think oral drug launch expectations for Lilly are too high,” they said.

Max Knoblauch

Delta, American, and rival airlines boost Q1 sales outlooks on strong demand; costs rise, too

Airlines are soaring as they say revenue is coming in higher than expected in the first quarter. That’s likely in part because they’re raising ticket prices to account for higher fuel costs.

Claire Yubin Oh2h

Nebius drops after announcing that it aims to raise $3.75 billion in a convertible loan offering

Nebius dropped as much as 7.5% in premarket trading on Tuesday, after the AI infrastructure company announced its intentions to sell $3.75 billion worth of convertible senior notes with maturities in 2031 and 2033.

The company will offer the debt in two tranches, the first batch worth $2 billion and due March 15, 2031, followed by $1.75 billion worth of notes due March 15, 2033. There’s also the potential for an additional $562.5 million of these notes to be issued via an over-allotment option.

The interest and initial conversion rate will be determined at the pricing of the offering, but regardless of the premium, a $3.75 billion offering would be pretty sizable for a company that closed yesterday’s trading session with a ~$33 billion market cap, and the market is quickly pricing in a decent chunk of equity dilution.

The offering is conspicuous in its timing, with Nebius soaring 15% yesterday on the back of a major infrastructure deal with Meta — worth up to $27 billion over five years.

The funds will likely be put to good use to deliver on some of these major projects. Per the company’s press release, the capital raised will be used to:

“...finance the continuing growth of its business, including expenditures related to the construction and build-out of its data centers, investments to develop its full-stack AI cloud, the expansion of its data center footprint and the procurement of key components (including GPUs), and for general corporate purposes.”