Stock Market

Looking for a Quantum Computing Play? IONQ Stock Deserves a Considered Look.

IonQ (NYSE:IONQ) has led the way among publicly traded quantum computing stocks with its trapped-ion approach that uses charged atoms for qubits. The company claimed the world’s mightiest 32-qubit quantum computer. Aiming at modular quantum computing, IONQ stock offers access through leading cloud platforms to strengthen its market presence.

The company’s Q3 revenue came in at $6.1 million, shooting past guidance and marking an impressive year-over-year increase of 122%. The company projects Q4 earnings will come in between $5.3 million and $6.1 million. This sort of guidance raise is among the many factors that have led to stock price outperformance. In fact, IONQ stock has risen 115% over the past year alone.

Let’s dive into whether the company can hit these numbers, and whether this is a stock worth investing in right now.

Collaboration with Rescale

After the 2024 World Economic Forum in Davos, Rescale, a champion of cloud-based high-performance computing (HPC), shook hands with IonQ to combine accelerated cloud computing with quantum computing. The partnership intends to improve problem-solving in various fields.

The partnership with IonQ leverages Resclae’s cloud-based accelerated computing and extensive application catalog for quantum computing and unique problem-solving capabilities. Rescale’s infrastructure supports IonQ’s advanced quantum computers. This provides faster and more unique solutions for scientific and engineering challenges.

IonQ and Rescale have collaborated to integrate quantum computing into hybrid solutions by combining Rescale’s AI-based computational workflows with IonQ’s advanced quantum technology. 

The partnership is expected to accelerate R&D and promoting innovation in engineering and life sciences. Rescale CEO Joris Poort pointed out the collaborative ecosystem for breakthrough discoveries. 

IonQ Chief Revenue Officer Rima Alameddine concurred and stated that the synergy between their quantum computers and Rescale’s R&D platform aims to transform various sectors. This includes healthcare, life sciences, and national security. This partnership transcends hardware and software, creating a special ecosystem that empowers researchers to be bold and adventurous and achieve breakthroughs.

Target Technical Milestone Achieved in Advance

IonQ also surpassed its #AQ 35 technical milestone a full year ahead of schedule, quite a milestone in itself. This achievement leverages IonQ Forte, a high-precision trapped ion qubits and connected architecture. It enhances the capabilities of quantum applications such as machine learning and quantum chemistry. 

Peter Chapman, CEO of IonQ, emphasized the company’s commitment to robust and accurate quantum systems for commercial use. This should, in turn, accelerate the path to widespread quantum use.

Moreover, advancements in qubit count, detection hardware, and a new compiler are contributed. Aligning with IonQ’s journey, pushing for commercial application and industry standards– the #AQ metric, derived from an independent study, evaluates system performance in handling complex circuits. 

At #AQ 35, IonQ Forte can simultaneously process more than 34 billion possibilities. The company’s blog and upcoming research are available for technical details.

IonQ’s #AQ 35 milestone even enticed QuantumBasel as a buyer. Damir Bogdan, QuantumBasel CEO, expects logistics, finance, and pharma innovation on top of AI breakthroughs. IonQ’s quantum computers are accessible on big-name cloud platforms and used by clients like Airbus and Hyundai Motors.

Wait for Significant Green Signals Before Buying

IonQ certainly remains a noteworthy company in the nascent world of quantum computing. As this technology becomes readily-accessible, I can see a potential future in which companies like IonQ garner massive valuations. That’s perhaps what’s behind the company’s massive price-sales multiple right now, considering it’s still a pre-revenue player in this space.

I think that while calls for a speculative bubble are premature, investors ought to tread carefully with quantum computing stocks. The technology isn’t quite there yet, and it may be years before this tech is as pervasive as the bulls think it will be. Additionally, it’s unclear which company will come out ahead, as a number of private competitors will be looking for market share when the time comes.

That said, this is a stock I think is worth keeping a flyer on. If something happens and tech stocks get pummeled, that’s when I’d give this stock an even harder look. For now, I’ll happily watch the price action from the sidelines.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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