Shares of D-Wave Quantum (NYSE: QBTS) experienced an epic journey in the first five months of 2025 amid both good news and outspoken bearish critique. As of mid-June, though, the bulls seem to be winning: shares of QBTS are up nearly 87% year-to-date (YTD) and an astonishing 1,400% in the past 12 months.

Although all six analysts who have recently reviewed D-Wave rate it as a Buy, suggesting strong confidence in the stock, concerns about QBTS being overvalued may still give even optimistic investors pause. Consensus price targets would suggest that QBTS is likely to face downside potential of more than 43%, and the sky-high price-to-sales ratio of 248.51 does not help either.

So investors may wonder whether it still makes sense to initiate a direct investment in QBTS stock in an attempt to ride the recent rally or if mitigating this risk through a somewhat diluted approach may be more effective at this time. One way to achieve broader exposure is through exchange-traded funds (ETFs) that include QBTS as part of a diversified portfolio.

The Case for ETFs

Several dozen ETFs currently hold shares of QBTS, though in most cases, the stock accounts for a very small portion of the overall portfolio, typically well under 1%. Only a few funds have a weighting where QBTS exceeds the 1% threshold.

Among them, the Defiance Quantum ETF (NASDAQ: QTUM) stands out, holding the largest position in QBTS as a percentage of assets. D-Wave is currently the top holding in QTUM’s collection of quantum computing and machine learning companies, though it still comprises less than 7% of the fund's total portfolio.

A benefit of ETFs in general is their diversification, and QTUM is a good example of this. With a focus on the emergent quantum computing space, which has numerous companies jockeying for position as businesses outside of the industry reckon with how to integrate quantum into their existing operations, QTUM's focus on more than 70 positions helps to insulate investors from the risk that even a strong quantum company like D-Wave carries.

QTUM also manages to provide investors with a dividend, something that cannot be said for D-Wave alone. Although modest, QTUM's dividend yield of 0.62% means passive income for investors, a key advantage over QBTS shares on their own. QTUM's performance is certainly not as high as D-Wave's in the last year, having returned about 9% YTD and 41% in the past 12 months, but this comes with the risk-reward trade-off described above as well.

The Case for QBTS

Investors may be more inclined to focus specifically on QBTS shares if they feel more optimistic about D-Wave as an individual company relative to the broader quantum space. QBTS may also appeal to investors with a higher degree of risk tolerance.

It is undeniable that D-Wave's share price performance over the past year has outpaced not only all ETFs holding QBTS shares but also all currently available ETFs, period.

The real question is whether this rally will be sustainable in the future. Despite major gains on breakthrough news from D-Wave surrounding its Advantage2 system and a positive first-quarter earnings report earlier this year, short sellers remain vocal about the company's risks.

One positive sign for QBTS, though, is that the stock has recently made an improvement of nearly 8% in short interest versus the previous month. This could be a signal that positive sentiment surrounding the company could be based as much on a conviction that it has truly revolutionary technology that will yield sustainable performance metrics as it is based on quick surges in response to bits of good news.

Ultimately, an individual investor's decision to gain exposure to QBTS via an individual investment or via an ETF will likely come down to risk tolerance and a view of the quantum computing industry and D-Wave's likely role in it going forward.

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