The year is off to an exciting start for quantum computing leader D-Wave Quantum Inc. (NYSE: QBTS) as the firm has announced major new contracts, acquired a key rival in Quantum Circuits, and set off some warning signs for investors with shelf registrations adding to about $330 million. The last of these seems to have offset the positive developments for many investors, as QBTS shares are down almost 20% year-to-date (YTD).
Amid all the other updates as D-Wave aims to cement its position as a dual-focused quantum annealing and gate-model firm, the company is quietly expanding its reach into the defense sector through an expanded partnership aimed at serving U.S. air and missile defense needs. But can the project lead to real business gains for D-Wave? Or is it the latest in a series of developments that, while promising on paper, may not yet translate into sales boosts or profitability?
Inside D-Wave's Latest Collaboration With Davidson and Anduril
The late-January announcement reveals a collaboration with defense and aerospace consulting outfit Davidson Technologies and autonomous system defense tech firm Anduril Industries.
The goal is to create hybridized quantum-classical computer applications for U.S. air and missile defense planning scenarios.
The results of the joint efforts are already promising—D-Wave said that a hybrid quantum-classical approach yielded both a ten-fold reduction in time-to-solution and a 9% to 12% improvement in threat mitigation. In a 500-missile attack simulation, the partnership intercepted an additional 45–60 missiles, surpassing earlier efforts.
D-Wave previously partnered with Davidson in early 2026, installing an Advantage2 quantum annealing computer system at the latter company's headquarters in Alabama. The partnership aimed to build on quantum research efforts with defense applications, with an eye toward serving the U.S. Department of Defense.
Is Another Practical Application of D-Wave's Tech Emerging?
This latest expansion builds on the earlier partnership between D-Wave and Davidson and moves toward a new practical use case for the Advantage2 system, which has received less hype in recent months as D-Wave has appeared to shift its focus toward more traditional gate-model quantum tech. Last year's Davidson partnership, while promising, was fairly open-ended and did not immediately make clear to investors how the company might translate an expansion into the defense space into real sales.
The 2026 announcement, on the other hand, already comes with a bit of practical data suggesting it could be marketable for government and military agencies. With proof that quantum systems can outperform traditional classical ones emerging, there is a stronger case to be made that the military will gain strategic advantages by enlisting D-Wave in future operations.
On the other hand, though, the company has yet to announce any significant U.S. military contracts and certainly faces significant competition if it does expand into the defense world. D-Wave does not seem to be positioning itself as a defense company overall—rather, it appears to be making a number of cases that quantum tech can be revolutionary across many industries and sectors. Investors may be excited about the potential for this technology to be transformative, or they may worry that D-Wave is spreading itself too thin—despite its significant cash reserves—to be truly successful in any of those cases.
Has D-Wave's Partnership With Davidson Moved the Needle For Analysts?
It's not entirely clear how Wall Street reacted to D-Wave's announcement of its expanded partnership. To end January, three firms—Rosenblatt Securities, Needham & Co., and Canaccord Genuity—all either reiterated Buy ratings or set fairly lofty price targets for QBTS shares.
The company is broadly favored across the analyst class and now has a consensus price target above $38 per share, 80% higher than where the stock is trading as of mid-February.
However, it's difficult to assess whether that positive analyst reaction was the product of D-Wave's defense move, as it could be related to other updates the company issued at the same time, including the announcement of a major quantum-computing-as-a-service (QCaaS) agreement with a Fortune 100 company and a key sale of an Advantage2 system to Florida Atlantic University.
What is clear, however, is that the firm continues to make aggressive efforts to expand its reach into the new year.
Investors will have to determine for themselves if D-Wave's approach is likely to be successful.
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The article "What to Make of D-Wave's Latest Defense Industry Push" first appeared on MarketBeat.
