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A mid-April surge to nearly $22 a share was short-lived, and now D-Wave Quantum Inc. (NYSE: QBTS) is once again trending downward, as it has for much of the year so far.

There's no doubt that it is a difficult time for quantum computing stocks, with pressure mounting from investors for pure-play companies to prove their mettle by demonstrating that they can actually generate sales and profit. Despite some important progress in this direction, these goals remain elusive for D-Wave and many of its rivals.

Another challenge facing D-Wave? A wave of new entrants into the space, as novel quantum players reach the market and legacy tech companies not previously involved in quantum computing are beginning to expand their operations into this area.

Two recent developments highlight how quickly the quantum ecosystem is getting more crowded—and a third, longer-term risk could draw even more companies into the space.

Cisco's Universal Quantum Switch Could Be a Game Changer, But in What Way?

Global hardware, software, and telecom giant Cisco Systems Inc. (NASDAQ: CSCO) may not be a direct competitor of D-Wave and other pure-play quantum companies, but its growing presence in the space is nonetheless a complicating factor.

Cisco recently introduced its Universal Quantum Switch, a key quantum networking tool that aims to direct quantum information between systems without destroying the information in the process. This has previously been a major hindrance in quantum architecture.

Cisco's new switch helps to cement it as an essential provider of quantum infrastructure of a kind that is different from the quantum systems that D-Wave and other rivals build. In this way, there may not be significant direct competition, and indeed, Cisco's newest product could provide a major boost to those other systems. At the same time, though, the lower the barriers to entry into the quantum space, the more likely it may be that other legacy tech firms will bulk up their quantum operations, crowding the field even further.

Honeywell's Quantinuum Looks Ahead to Ambitious IPO

Automation and aerospace firm Honeywell International Inc. (NASDAQ: HON) is not known as a quantum company, but it is preparing to bring one to investors via IPO.

Quantinuum, which was formed half a decade ago after separating from Honeywell, filed in mid-April for a U.S. IPO after being valued at $10 billion in a fundraising round last fall. Honeywell remains the majority owner of Quantinuum.

Besides the entry of yet another new quantum computing business to the U.S. equities space, the fact that Quantinuum is going public via IPO (rather than via special purpose acquisition company) suggests company leaders are confident it will hold up in the face of heightened scrutiny during the process. The major backing from $135-billion Honeywell certainly helps in that regard.

However, Quantinuum's aspirations go beyond that, as it aims to be the "largest standalone integrated quantum computing" firm. Quantinuum's Helios quantum computing system launched in 2025 and may be an increasingly viable alternative to D-Wave's Advantage2 system or similar offerings from rivals.

The soon-to-be-public company also tallied up some $600 million in investments late last year and won a partnership with NVIDIA Corp. (NASDAQ: NVDA). It seems poised to be a major player in quantum.

The Cybersecurity Factor

Another major consideration for investors attempting to select future quantum winners is the increasing threat the technology poses to cybersecurity.

Everything from traditional security systems to Bitcoin may be vulnerable to security risks thanks to the power of quantum computing, with analysts speculating that the biggest impact may still be years away.

Again, this may not seem to directly impact an investment in a pure-play quantum company like D-Wave right now. But cybersecurity is big business across virtually every industry that is globally connected. As it becomes clearer just the type of risk that ultra-powerful quantum systems may pose to pre-existing security tools, there will undoubtedly be an incentive for new companies to get involved in the quantum space as a way of adapting. The quantum computing field will likely once again get more crowded, making it all that much harder still for individual firms to stand out.

Despite its slump in recent months, D-Wave stock is still up by over 190% in the last 12 months. This impressive rally has already reversed itself in 2026 and could face further challenges going forward as well based on factors entirely outside of the company's control. This makes the race toward marketability and profitability even more urgent for D-Wave and its peers.

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