D-Wave Quantum (NYSE:QBTS) recently experienced a significant change as it was dropped from several Russell indices, which had notable implications on the company's stock performance. Despite this, the company saw a remarkable 104% price increase over the last quarter, supported by its $400 million follow-on equity offering and strategic alliances, such as the memorandum of understanding with Yonsei University. While the broader market remained flat, D-Wave Quantum's substantial stock price growth stands out, aided by positive earnings results and the launch of the Advantage2 quantum system, indicating investor optimism about its technological advancements.

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D-Wave Quantum shares have exhibited a very large total return of over 1124% in the past year. This exceptional growth significantly outpaces both the broader US market, which had a return of 13%, and the US Software industry, which returned 20.6%. Such impressive gains highlight investor enthusiasm and reflect optimism toward D-Wave's quantum computing advancements and strategic moves.

The company's recent financial and strategic activities may impact future revenue and earnings forecasts. The introduction of the Advantage2 system and collaborations with institutions like Yonsei University position D-Wave Quantum well for growth, but the company's unprofitability remains a critical concern. Despite the current share price being near the target set by analysts, at US$16.57, the alignment suggests that investor expectations might be tempered considering prior volatility and market conditions.

Our valuation report unveils the possibility D-Wave Quantum's shares may be trading at a premium.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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