D-Wave Quantum just posted its biggest single-day gain in months, closing at $25.74 after a 33% Thursday spike — yet the short base barely moved, and the borrow market is tightening fast. That disconnect is the story of the week.
The price explosion is the obvious headline. QBTS is up 16% on the week and 19% over the past month, a sharp reversal after the stock sold off nearly 11% on the day of its May 12 earnings print and fell 24% over the five days that followed. What's striking is that Thursday's surge came after last week's note flagged the stock entering its June 1 Q2 event with a substantial short base still intact. That base hasn't capitulated. Short Interest % of Free Float edged up slightly to 15.6% — roughly 54 million shares — a modest 0.5% rise on the day and 2.7% on the week. A 33% rally didn't trigger a rush for the exits. Shorts, for now, are holding.
The borrow market is tightening in response. Availability has dropped sharply — down 46% on the week to 27.2%, from above 50% just a week ago. At 27%, there are roughly one-quarter of a share still available for every share already borrowed, a noticeably tighter setup than the 40–55% range that prevailed through most of April and early May. Cost to borrow has climbed to 0.95%, up 20% on the week and a 30-day high — still cheap in absolute terms, but the direction is clear. The 52-week low on availability was 0.7%, recorded earlier this year, which gives a sense of how much tighter conditions could get if the price rally continues and covering pressure builds. Options traders, by contrast, remain relaxed: the put/call ratio is running at 0.70, almost exactly in line with its 20-day average of 0.70 and well below the 52-week high of 1.00. No hedging surge here.
The analyst community has been broadly bullish but slightly on the back foot since the May 12 earnings miss. All five firms that updated their views on May 13 maintained positive ratings — Canaccord, Rosenblatt, Cantor Fitzgerald, Mizuho, and Needham all held Buy or Overweight stances. Two of those (Canaccord and Mizuho) trimmed targets modestly, with Mizuho cutting from $31 to $29. The consensus mean target is $35.17, which at today's $25.74 close implies roughly 37% upside — though that gap has narrowed materially with this week's rally. The bull case centres on D-Wave's position as a working, commercially deployed quantum system in a market still mostly at the proof-of-concept stage. The bear case is equally direct: fierce competition from better-capitalised tech giants, a long road from pilot contracts to recurring revenue, and a balance sheet that remains loss-making with no clear path to profitability in the near term. The price-to-book multiple is running at 10x, up nearly 2x over the past month on the back of the stock's re-rating.
Insider behaviour adds a cautionary note. Every recent transaction in the data has been a sale. CEO Alan Baratz sold 18,542 shares on May 13 at $22.35. CFO John Markovich sold on April 13. EVP Sophie Ames has sold in three separate tranches since mid-April, including 23,025 shares as recently as May 20 at $18.98 — a sale made the day before Thursday's 33% surge. Net insider activity over the past 90 days is technically positive at roughly 152,000 shares, but that figure is distorted by Alan Baratz's reported holding increase in institutional data; the actual open-market transaction record shows consistent selling at multiple price levels. The closest peer by correlation, ARQQ, surged 25.7% on Thursday and is up 18.6% on the week — a near-identical move that suggests the rally has a sector-wide bid rather than being QBTS-specific.
With Q2 results due June 1, the setup is a stock that has reclaimed much of the post-earnings drawdown, a short base that has not meaningfully unwound despite a violent squeeze session, and availability tightening at pace. The question heading into the next print is whether Thursday's catalyst — whatever drove it — changes the earnings narrative, or whether 15.6% short interest and a still-unprofitable business simply resets the debate once Q2 numbers land.
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