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 1:49PM

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.

Toby Bochan, Luke Kawa

Markets end the week in the red as Broadcom and Oracle concerns drag the entire AI trade down

The S&P 500, Nasdaq 100, and Russell 2000 were all negative on Friday.

Matt Phillips6h

Data center trade deep in the red

The data center trade is seeing its steepest sell-off since the market rout that was ignited by President Donald Trump’s Rose Garden tariff announcement back in April.

Goldman Sachs’ themed basket of AI data center shares was down more than 6% at around 12 p.m. ET, putting it on track for its worst day since the tariff announcement.

Losses hammered seemingly every form of input needed for the sprawling concrete server warehouses at the heart of the investment boom.

Hardware makers including data storage companies like Sandisk, Western Digital, and Seagate Technology Holdings, as well as DRAM maker Micron — some of the best-performing stocks in the S&P 500 this year — were taking a licking, as were networking stocks Cisco and Arista Networks and data center builders such as Vertiv Holdings and electrical and mechanical contractor Emcor.

Optimism for all things AI has seemed to evaporate throughout the week, as the stock market greeted lackluster quarterly numbers from Oracle and Broadcom with jittery sell-offs and concern about growing debts that could crater cash flows.

Those worries seem to be spreading to ancillary beneficiaries of the AI boom on Friday, gouging a chunk out of charts that retail dip buyers have not — at least so far — stepped in to buy as we head into the weekend.

Luke Kawa7h

Oracle denies Bloomberg report that it’s delaying some data centers for OpenAI to 2028 from 2027

Getting a multi-hundred-billion-dollar backlog for cloud computing revenues from data center projects is easy. Building them is hard.

Oracle extended declines to as much as -6.5% on the day on the heels of a Bloomberg report that the cloud giant has pushed back the completion dates for some of the data centers it’s building for OpenAI to 2028 from 2027, citing people familiar with the work. Oracle denied this report, telling Reuters that there have been no delays to any sites required to meet its contractual commitments and that all milestones remain on track.

Shares had fully pared their report-induced drop ahead of Oracle’s reply, but remain in the red for the day.

Bloomberg said the reported postponement was attributed to labor and material shortages.

Oracle has been spending more on capex than Wall Street had anticipated, leading to higher-than-expected cash burn. Management boosted its full-year capital spending plans by $15 billion after reporting Q2 results earlier this week.

Oracle’s cloud infrastructure sales came in short of estimates in its fiscal 2026 Q2, a signal that markets already had reason to doubt its ability to quickly turn its humungous RPO (that is, remaining purchase obligations) into revenues.

Traders also seem to be of the mind that potential delays to data center completions are going to limit sales for what goes into them.

Some of the bigger losers since the Bloomberg headline hit the wires include:

Nvidia and Advanced Micro Devices, the latter of which struck a deal to deploy 50,000 of its AI chips in Oracle data centers.
AI REITs like Equinix and Digital Realty.
Server company Dell as well as other AI-geared stocks like Constellation Energy, Arista Networks, Corning, Generac Holdings, Quanta Services, Vistra, and Eaton Corp.

Luke Kawa8h

Broadcom’s post-earnings tumble is weighing on Google’s entire AI ecosystem

Broadcom’s post-earnings plunge is prompting a sharp pullback in Google-linked AI stocks, which had been on fire thanks to the warm reception to Gemini 3.

The stocks getting hit hard:

Celestica, which supports Broadcom’s Tomahawk switch chipset for AI networking.
TTM Technologies, which manufactures the circuit boards that are the foundation for Broadcom’s AI chips.
Lumentum, whose laser technology lets information move around quickly in data centers.

A basket of these Google-linked AI stocks compiled by Morgan Stanley is suffering one of its worst losses of the year. This brisk retreat also follows the release of GPT-5.2 by OpenAI.

Matt Phillips8h

Citi initiates coverage of Planet Labs with “buy” rating

Planet Labs was up after aerospace and defense analysts at Citi initiated coverage with a “buy/high risk” rating and $19 price target.

The stock is up more than 40% this week, after a strong earnings result that spotlighted the company’s growing opportunity in linking its core business of capturing daily images of the planet with AI technologies.

Citi analysts noted the potential for a positive flywheel effect for Planet Labs as it deepens its focus on integrating AI into its offerings:

“AI is accelerating the conversion of pixels to decisions, where Planet’s daily scan and deep archive offer a uniquely large training corpus and broad-area foundation for automation. AI-enabled solutions (MDA/GMS/AMS) are gaining traction with customers such as NATO and the U.S. DoW, validating the approach of integrating AI into broad-area monitoring products... These AI moves create a compounding advantage: more coverage generates more training data, which improves models, which in turn increases product utility and addressable demand.”

The stock has also caught the attention of some of the retail trading crowd, with call options activity spiking on Thursday as traders rode the market reaction to the results.