D-Wave Quantum (QBTS) stock is gaining on Friday after BMO Capital started coverage with an Outperform rating and a $35 price target, implying about 86% upside from the stock's latest close. Analyst Harsh Kumar sees D-Wave as one of the better-positioned companies in the quantum computing market. The 5-star analyst pointed to its commercial revenue and two-part technology approach.

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BMO Sees D-Wave as a Quantum Computing Leader

Kumar believes D-Wave has an advantage because it already generates commercial revenue. He also pointed to its work across both annealing and gate-model quantum computing.

"We believe D-Wave is best positioned in the quantum space to have commercial success," Kumar said. He cited the company's "industry first-mover advantage" and its dual technology approach.

The analyst also sees room for D-Wave to grow as more companies move from testing quantum systems toward real-world uses.

D-Wave Is Building Commercial Momentum

D-Wave's latest results give some support to the bullish view. The company reported $35.5 million in first-half bookings, up more than 1,120% from a year earlier. Its remaining performance obligations also rose 668% to $40.7 million.

However, revenue remains a weak spot. D-Wave reported about $3.1 million in second-quarter revenue, below Wall Street expectations. Also, the loss came in at $0.13 per share, which was wider than the analyst consensus estimate of $0.09 per share.

CEO Alan Baratz said the results show "strong execution, expanding commercial adoption, and differentiated technology leadership."

Is QBTS Stock a Good Buy Now?

On the Street, D-Wave Quantum Inc. has a Strong Buy consensus, based on 15 analysts' ratings. The average QBTS price target is $35.79, implying about 90% upside from the current price.