Key Takeout
- Exxon Mobil has seen a 7.7% year-to-date increase, while D-Wave’s stock has surged by 81.3%, illustrating a stark contrast in performance.
- D-Wave’s technology is utilized across various sectors, including aerospace and oil.
- Exxon Mobil is collaborating with IBM to leverage quantum computing for cleaner fuel and improved efficiency.
Quantum computing is an innovative technology that holds the potential to resolve highly complex issues within minutes. It could soon redefine traditional sectors, particularly energy. In this scenario, we have Exxon Mobil Corporation and D-Wave Quantum Inc.. Each has shown markedly different results this year—the former gaining 7.7%, while the latter exploded by 81.3%. However, it’s essential to look beyond just the stock charts and consider the overall business landscape for both firms.
Why Do Major Oil Companies Need Quantum Computing?
Navigating a significant energy company like ExxonMobil poses numerous challenges. From sourcing top-notch resources and drilling operations to managing an extensive global supply chain—the complexity is substantial. Sure, traditional computers can handle issues, but solving ones with millions of variables can be time-consuming and expensive.
D-Wave, on the other hand, specializes in optimizing these problems. They focus on building unique quantum computers that can sift through massive datasets to identify the best options.
Is D-Wave Already Tackling Similar Challenges?
It’s interesting to note that D-Wave is already enabling companies to address significant challenges. For instance, they assisted aerospace and defense firms in pinpointing which projects to prioritize across 12 different developments. They even created a system to optimize police patrol routes, achieving over 90% efficiency with calculations taking mere seconds.
Additionally, D-Wave has collaborations in the oil and gas sector. Recently, they expanded their contract with Aramco, aiming to utilize quantum technology for geophysical optimization hurdles.
Does ExxonMobil Use Quantum Technology?
Quantum computing is one of the advanced technologies that ExxonMobil is actively exploring for enhancing energy research and overall efficiency. By teaming up with tech giants like IBM, ExxonMobil can now simulate intricate chemical and natural processes much more swiftly. This capability allows for innovative approaches to optimize clean fuel development while addressing the growing global energy demands and minimizing environmental footprints.
What Is the Best Move for Investors?
The surge in companies adopting quantum computing clearly points to a positive future for both D-Wave and ExxonMobil. However, investors should exercise caution before diving into stock purchases, as both companies appear to be overvalued.
ExxonMobil is currently trading at 7.24 times its two-month Enterprise Value to EBITDA, while D-Wave sits at 7.46 times its twelve-month price-to-book ratio. Both metrics exceed their respective industry averages—4.39 times for ExxonMobil and 6.47 times for D-Wave.
As it stands, both QBTS and XOM carry a Zacks rank of #3 (hold). This indicates a wait-and-see approach might be prudent for investors considering entering these stocks.
