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Investing.com -- Shares of D-Wave Quantum (QBTS) dropped 4% after being targeted as a short by Kerrisdale Capital. The report from Kerrisdale criticized D-Wave’s core technology, quantum annealing, labeling it as a "commercial dead end" that has been abandoned by the rest of the industry.
The report further alleges that D-Wave’s strategy, which emphasizes "hybrid solvers" for optimization problems, is misleading. These solvers are purported to be a blend of quantum and classical computing, but Kerrisdale’s findings suggest they are predominantly classical. Insiders reportedly claim that the quantum aspect is more of a marketing tactic than a substantial technological component.
Kerrisdale’s report accuses D-Wave of obscuring the actual mix of classical and quantum computing in its offerings to customers, while charging a significant premium for the quantum branding. This practice has reportedly made some former employees uncomfortable.
Interviews conducted with D-Wave’s customers from various sectors, including manufacturing, pharmaceuticals, and logistics, revealed that the company’s technology offers minimal to no advantage over traditional classical solutions. This revelation aligns with the stagnation in client growth that D-Wave is experiencing. A former D-Wave engineer was quoted as saying, "there is no proof" that the company’s technology can solve optimization problems faster than classical methods.
The negative sentiment from the report has impacted investor confidence, leading to the decline in D-Wave Quantum’s stock price. The company has not publicly responded to the allegations made by Kerrisdale Capital at this time.
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