D-Wave Quantum heads into its June 1 Q2 earnings event with a 53% weekly gain, a short base that still hasn't broken, and borrow availability tightening further — a setup more charged than the one that preceded last month's 11% post-earnings drop.
The price action this week is striking on its own. QBTS closed at $27.82, up 53% on the week and 50% over the past month, extending the recovery that began after the May 12 earnings sell-off. That print saw the stock fall nearly 11% on the day and 24% over the following five sessions. The subsequent reversal has been fierce. Tuesday gave back 5.4%, a reminder that the moves in both directions are violent. Peers confirmed the risk-on tone was broad: ARQQ gained 30% on the week, GRRR rose 27%, and BTQ climbed 33% — so QBTS is running with the group, not ahead of it on isolated news.
Shorts have barely moved despite the rally, and the borrow market is tightening further. SI % of Free Float edged up to 15.9% — roughly 55 million shares — a 4% rise on the week. The previous note flagged that a 33% Thursday surge hadn't triggered capitulation. Another 53% weekly move hasn't changed that calculus either. Availability has tightened to 26.9%, down from 40%+ just two weeks ago and from 55% in mid-May. The 52-week low is 0.7%, so there is room to tighten further, but at roughly one share available for every four already borrowed, new short positions are becoming more expensive to establish. Cost to borrow has risen 39% on the week to just over 1%, still low in absolute terms but the move is directionally consistent with the tightening availability story. The ORTEX short score sits at 67.3, in the bottom 7th percentile of the universe for short score rank — signalling elevated short-side pressure.
The Street remains broadly constructive but has been trimming targets following the May 12 miss. The most recent analyst activity, all from May 13, shows no rating downgrades — Canaccord, Rosenblatt, Cantor Fitzgerald, Mizuho, and Needham all maintained Buy or Outperform calls. Canaccord and Mizuho both lowered targets slightly, to $41 and $29 respectively, while others held at $40–$43. The consensus mean target is $35.17 against a current price of $27.82, implying meaningful upside on paper — though the gap has narrowed sharply as the stock has rallied. The bull case centres on D-Wave's first-mover positioning in commercial annealing quantum systems and bookings growth. The bear case is harder to dismiss: recurring earnings misses, a negative earnings yield, price-to-book near 11x with deeply negative returns on equity, and the risk of further dilution via secondary offerings. The 90-day EPS momentum factor score sits at a strong 94th percentile, but the 30-day reading has collapsed to the 18th percentile — a divergence suggesting near-term estimate pressure is building even as the longer arc looks better.
Insider activity adds a cautious note. Every transaction in the recent window has been a sale. The CEO, CFO, Chief Legal Officer, and EVP have all sold shares since mid-April, with the CLO and EVP continuing to sell through this week at prices between $19 and $25. The CEO sold 18,542 shares at $22.35 on May 13, the same day analysts were reiterating Buy calls. The net 90-day insider figure technically shows a small positive balance due to earlier activity, but the directional read from recent weeks is unambiguous: management is selling into the rally, not buying it.
The last two earnings events offer a consistent pattern. The May 12 print produced an 11% one-day drop and a 24% five-day decline. The prior event — May 7 — saw a 5% one-day fall and a 7% five-day loss. With June 1 now days away, the stock has rallied hard into the event, availability has tightened from the levels that preceded the last print, and the short base is larger not smaller. Whether the June 1 event replicates or breaks from that pattern is what the positioning now hinges on.
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