D-Wave Quantum vs. Microsoft: Which Is the Better Quantum Computing Stock to Own for the Next 5 Years?

Quantum computing has significant potential to transform a host of technologies, including cybersecurity, artificial intelligence, materials science, and drug discovery. But it's still in a relatively early stage of development, which makes it difficult to guess now which quantum computing stocks might be winners over the long term. Two companies on many investors' quantum computing radar are pure-play D-Wave Quantum (QBTS -6.42%) and tech giant Microsoft (MSFT +0.27%). Given where the quantum computing market is right now, and considering Microsoft's financial advantages, Microsoft stock is the no-brainer winner. Image source: Getty Images. What's happening with D-Wave right now? I get the appeal of owning a piece of D-Wave. At face value, who wouldn't want to invest in a leading quantum computing company that's betting everything on its ability to develop some of the most advanced computing systems ever to exist? The company has recently scored some meaningful wins, too, including a 1,120% increase in bookings to $35.5 million in the second quarter. Bookings are potential revenue, not actual sales yet, but they are a good indicator that customers are very interested in D-Wave's quantum annealing technology. AT&T is one such customer that has just agreed to expand its use of D-Wave's quantum computers, and may use them for "complex optimization challenges across its network operations." The telecom will experiment with the tech to improve its outage detection and response, manage technician routes, and plan new network expansions. ExpandNASDAQ: QBTSD-Wave QuantumToday's Change(-6.42%) $-1.34Current Price$19.53Key Data PointsMarket Cap$7.3BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.Day's Range$19.45 - $20.7152wk Range$12.75 - $46.75Volume54.3KAvg Vol28.3MGross Margin-730.78% But bookings aren't sales, and D-Wave's revenue in the quarter was just $3 million. Revenue for most quantum computing pure-play companies is lumpy because they rely on large contracts that don't come regularly. The company also isn't profitable and likely won't be for many more years, given its limited customer base and the investments it is making in developing its quantum computing technology. That makes D-Wave a pretty risky bet right now, especially since the company's shares are trading at a hefty premium. D-Wave's stock has a price-to-sales (P/S) ratio of 610, which is drastically more expensive than the average P/S ratio of about 8 for companies in the technology sector. Why Microsoft is a better quantum computing stock Microsoft is best known these days as a leading AI player, but it has also made some big strides in quantum computing. For example, Microsoft developed what it calls a topological superconductor, or topoconductor, that can create more stable qubits -- the fundamental units of computation for quantum computers. The processor that it has built around these topoconductors, Majorana 1, is expected to eventually help Microsoft scale up to 1 million qubits on a single processor. That's a goal many companies have set because at that scale, a fault-tolerant quantum computer would be capable of handling what the company describes as "transformative, real-world solutions." What's more, Microsoft has already commercialized its Azure cloud system for quantum computing services.

With Azure Quantum, companies can rent the service for advanced research. It's an early indicator of how Microsoft will use its successful Azure cloud business to sell quantum computing services in the coming years. ExpandNASDAQ: MSFTMicrosoftToday's Change(0.27%) $1.28Current Price$481.63Key Data PointsMarket Cap$3.6TMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.Day's Range$477.15 - $484.2752wk Range$349.20 - $553.72Volume87.7KAvg Vol40.1MGross Margin67.94%Dividend Yield0.74% This is especially important for investors because in its fiscal 2026, which ended June 30, Azure surpassed $100 billion in annual sales (up 41% from fiscal 2025). Microsoft remains the second-largest cloud infrastructure player, behind Amazon. This means that Azure's growing success makes it more likely that customers will naturally migrate to additional Microsoft quantum computing services as they become available. And if all that isn't convincing enough, Microsoft reported $4.74 in earnings per share in fiscal Q4, and $19.6 billion in free cash flow. At a time when investors are growing skeptical that big tech's large investments are paying off, Microsoft has proved that it knows how to develop new technology without breaking the bank. Oh, and its shares are well-priced, too. Microsoft's stock trades at a price-to-earnings ratio of just 27 compared to the tech sector's average of 36. All of this makes Microsoft a great quantum computing stock to hold as the quantum computing market develops over the next five years.