What’s Happening With IONQ Stock?

IonQ Inc. (NYSE: IONQ), a quantum computing company, has seen its stock price surge by an impressive 400% in the last twelve months. This reflects growing interest in quantum computing, a field with the potential to revolutionize various industries. Unlike conventional computers that use binary bits, quantum computers leverage qubits capable of existing in multiple states simultaneously. This fundamental difference allows them to perform complex calculations and process vast amounts of data by exploring numerous potential outcomes at once. The applications of quantum computing are broad, ranging from financial modeling and drug discovery to materials science. Despite its promise, quantum computing faces a significant hurdle: errors increase as systems grow more complex with higher qubit counts. This makes the technology inherently volatile, as is common with emerging futuristic technologies.

However, significant advancements are being made. Companies like Google, IBM, and IonQ have demonstrated the ability to build scalable quantum computers with dozens of qubits, marking a crucial step toward practical applications. IBM is a leader in this space, with its 1,121-qubit Condor processor and plans to develop 100,000-qubit systems by 2033. IonQ has also released new quantum systems, such as Forte, which offers software configurability and flexibility for researchers. That said, if you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception. Separately, see – What’s The Downside Risk For Snap?

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IonQ’s Approach and Offerings

IonQ offers a range of quantum computing solutions, including high-performance quantum computers and networking systems. These are accessible through cloud platforms and direct contracts, including Amazon Braket, Azure Quantum, and IonQ’s own Quantum Cloud.

IonQ’s distinctive approach uses trapped ions as quantum bits. Specifically, they use ionized ytterbium atoms, which are ionized by removing an electron using lasers in a process also referred to as “trapping.” These ions are held in place by a specialized chip.

IonQ’s offerings include IonQ Forte – a 36-qubit quantum computer designed for commercial and research applications. An enterprise version is also available. They also offer IonQ Aria: – a 25-qubit quantum computer accessible via the cloud. The company will launch Tempo later this year, targeting large businesses and governments with 99.9% fidelity.

IonQ’s management recently drew parallels between their company and Nvidia in the quantum computing space, further fueling investor optimism.

Investment Outlook and Risks

While quantum computing shows immense promise, it remains in a developmental stage and isn’t yet ready for widespread practical implementation. IonQ’s revenue base of $43 million in the last twelve months is relatively small, and the company reported an operating loss of $255 million over the same period.

IonQ’s stock is highly susceptible to adverse market conditions, demonstrating significantly higher volatility compared to the broader market. For instance, during the 2022 inflation shock, IonQ’s value plummeted by 90%, whereas the S&P 500 experienced a peak-to-trough decline of 25.4%. Similarly, during the COVID-19 pandemic market correction, IonQ lost 51% of its value from its peak, in stark contrast to the benchmark index’s 34% decline. This pattern highlights the considerable risk of IonQ’s stock dropping during unfavorable market conditions.

Like most quantum computing stocks, IONQ represents a high-risk, high-growth potential investment. Key factors influencing its trajectory include continued technological improvements and managing costs. IonQ could potentially sell numerous quantum computers in the coming years, which might continue to drive its stock higher.

As an investor, a bet on IonQ is a bet on the future potential of quantum computing and IonQ’s position within that future. The company is one of the few offering high-fidelity quantum computing accessible through platforms like Amazon Braket and boasts large customers such as Hyundai, Airbus, and Dow. As the technology continues to advance, we can expect to see improved accuracy from a broader range of companies in the quantum computing sector.

Looking at its past performance, IONQ stock has been quite volatile when compared to the broader markets. Returns for the stock were 55% in 2021, -79% in 2022, 259% in 2023, and 237% in 2024. In contrast, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is considerably less volatile and has comfortably outperformed the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

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