People are always looking for the next ‘big thing’ when it comes to technology, stocks, or even online social media trends. While the incredible advances in AI have been front-and-center in both the tech world and in the markets over the past few years, the rumblings about quantum computing are starting to grow louder.
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Investors are certainly paying attention to the companies that are working to build out and develop this new realm. One such company, IonQ, Inc. (NYSE:IONQ) has certainly benefited from the quantum computing excitement, and its shares are up over 564% over the past six months.
Still, such rapid growth might generally cause valuation concerns if it is not backed up by reality. Top investor James Foord–who sits in the top 4% of TipRanks’ stock pros–believes that the hype is justified when it comes to IonQ.
“This company has the most compelling fundamentals out of the publicly traded quantum stocks, with what I consider to be superior technology and a stronger roadmap,” writes the 5-star investor.
Foord explains that there are multiple reasons that IONQ has a leg up on its competitors in the quantum realm. For starters, with its technology accessable for clients via large cloud providers, the company has a compelling revenue model.
“For any business wanting to experiment with quantum computing, IONQ is really the easiest way to do so, and this is reflected in their revenue growth,” adds the investor, who points to its 2024 Q3 revenue growth of over 100% year-over-year as proof of the merits of this approach.
Foord also takes comfort from IONQ’s institutional support, including from major players such as Amazon, an investor in the company. The investor also notes that both institutional investors (36.59% of shares) and company insiders (8.9% of shares) own large chunks of the company.
Looking ahead to 2025, the investor is high on IonQ’s upcoming IONQ Tempo, which is slated to have a number of “actual commercial applications.” Though the company is still not profitable, with over $360 million in cash on hand and no debt on its books, Foord notes that IONQ’s “healthy financial position limits the chances of dilution and bankruptcy.”
All in all, Foord calls IONQ “superior choice” for quantum stocks. The investor is assigning IONQ a Buy rating. (To watch Foord’s track record, click here)
This optimism is reflected throughout Wall Street as well. With 4 Buy and 1 Hold ratings, IONQ holds a Strong Buy consensus rating. However, its rapid ascent has outpaced even this robust optimism, as its 12-month average price target of $40.00 would yield losses of some -12%. It remains to be seen if analysts will readjust their price targets-or their ratings-accordingly. (See IONQ stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
