This market's going into a speculative frenzy. People are racking up huge gains in quantum computing stocks even as the technology is still in its infancy. But maybe it's closer than we think. But I'm not scolding you. I want to take the speculation seriously, because maybe it's not that speculative after all. Which brings me to D-Wave Quantum, a stock that's up nearly 2,000% over the past 12 months. I want some of that.
Last Thursday, D-Wave reported. Honestly, I'm not quite sure what to make of the numbers. I'd rather just play with an open hand. The company is touting the fact that bookings were up 92% year over year. That's terrific. But like I said, quantum computing is still very early. That's why bookings stood at just $1.3 million. That's an M. At the same time, the company is losing big money, but you know, it has big money. So maybe. So what? So you can understand why more traditional investors struggle to justify more than a $6 billion market capitalization. But not me, because I'm open minded. I want to find out what's going on. If this is a technology whose time has come, then it makes sense.
So has quantum computing truly arrived, or has the stock gotten ahead of itself? Let's take a closer look with Dr. Alan Baratz. He's the president and CEO of D-Wave, to find out. Doctor, welcome to Mad Money.
Okay, so I'll tell you the conundrum I have. I heard we mentioned that you were coming on. Well, nobody stops me on the way to getting a haircut and never asks me about a stock. I got stopped twice saying, listen, you got to find out about that D-Wave. And one guy said that. That one said, I made a killing in D-Wave. And I said to myself, okay, I got to just try to let people understand why you're important, why people pay for you, and why this is now and not ten years from now.
So, Jim, we are quite unique in the quantum industry in the sense that we were the first and are the only quantum computing company that is truly commercial. And by truly commercial, what I mean is we have customers using our systems today as part of their business operations. This is not research experimentation. This is customers using us today as part of their business operations. Companies like NTT DoCoMo, a large cellular firm in Japan, companies like Mastercard.
Because Michael Miebach is someone I know really, really well, and Mastercard could use anybody and has tremendous ability to be able to fill with mathematicians. Really quite amazing. Most mathematicians under the roof of any other company. Why do they need you?
Yeah. So basically, our quantum computers today are really good at solving hard business optimization problems. These range from workforce scheduling to manufacturing plant optimization to protein folding. But one of the types of optimization problems is around optimizing loyalty rewards programs. So the idea is, how do you decide what program to offer to what customers to maximize uptake? That's a hard
optimization that most people think is intuitive. It's not, right?
And the way to make more money would be, can they bring you in to show them, or is that something? And will they pay you for that? Because I'm trying to figure out, if I could get that information, why not pay you $20 million for that information and get you to really mine it for me?
So it's not so much the information, it's the computation. We're not about big data. What we are about is solving hard computational problems to get to better answers and better outcomes.
Okay, so what for GE Vernova, which is a fabulous company that does alternative energy but also natural gas turbines, what kind of outcomes are you trying to find for them?
So basically, what we are trying to do is help all of our companies improve their business operations. Okay. And so in the case of GE Vernova or any energy companies, it's all about how do we optimize the grid and how do we make it more reliable.
Well, okay. So that is so important to GE Vernova that I would think that they would pay you a lot more money than maybe they're paying you now. Is that possible?
Absolutely. So we are, as I said, the only commercial quantum computing company, but we are still in the very early stages of commercialization. So today we are working with our customers through our professional services team to help them understand which of their applications can most benefit from quantum, to help them build out those applications, and then ultimately move them into production. As they start moving into production, that's where we will see a significant revenue uptick.
Okay, so I am also told at the same time you've got to ask about, is he going to destroy Bitcoin now? Can you explain to people why you may or may not be able to destroy Bitcoin?
Yeah. So we announced about two months ago that we had, for the first time ever, been able to show that our quantum systems can solve an important real-world problem, a useful problem that cannot be solved classically. Now, this happened to be a problem in the area of material simulation, basically computing properties of magnetic materials, which we can do in minutes. That can't be done classically even with millions of years. So that's a very significant result for the quantum industry. Nobody today had been able to show that they could solve a useful problem that can't be solved classically. What we were then able to do is take that computation and turn it into what we called a quantum proof of work for blockchain, the idea being that instead of using the typical computation for Bitcoin, which is SHA-256, what you could do is use this quantum proof of work as the underlying computation for cryptocurrency or other blockchain applications. Why is this significant? Because if Bitcoin today was using this proof of work rather than what they're currently using, we would consume 1,000 times less power. This is very energy efficient.
