With Quantum Computing on the Rise, IonQ (IONQ) Stock Looks Promising

Quantum computing is destined to change our world, with companies such as IonQ (IONQ) bringing us a step closer to the realms of science fiction. Just Imagine (like the title of a sci-fi film from 1932) a technology that can solve even the most complex problems in seconds – difficulties that would take today’s most powerful supercomputers thousands of years to solve. Well, this is what quantum computing promises to do.

In an early piece on IBM’s (IBM) ambitions on the matter, I referred to quantum power as Sauron’s ring and the potential of this technology to solve the unresolved. Well, that hasn’t changed, of course. This new tech is the next goal for scientists and dreamers alike. It is little wonder, then, that investors are enthusiastically and closely watch every step forward in this developing industry.

Quantum computing, in a nutshell, uses the principles of superposition and entanglement instead of the binary method on which computers currently operate. It can perform calculations at unimaginable speeds, potentially impacting almost every industry known, from biology and physics to the discovery of treatments and data centers. If AI has affected most industries nowadays, Quantum technology threatens to do the same. It will be like stepping into a sci-fi movie where the impossible becomes possible.

Like IBM, IonQ is currently one of the leading forces, thus creating a positive buzz among its investors. The company has forged crucial partnerships with the U.S. Army, academia, and the private sector. It recently achieved a crucial breakthrough and exhibited a remote ion-ion entanglement, trapping two separate ion qubits and forging a link between them. This is the basis necessary for quantum computing.

At this point in time, despite valuation concerns by some analysts, IONQ’s prospects look promising. But it’s only the beginning, and as the song goes, “The road is long… “

If you wish to read more on IonQ, you can see what James Fox, our writer at Tipranks, had to say about the company. Now, let’s briefly examine IonQ’s latest news in three talking points:

• Financial Performance and Market Position: IonQ’s Q3 revenue exceeded expectations, driving the stock up over 268% in the past 90 days. The company announced new bookings worth $63.5 million and offered new guidance on its revenue outlook in 2024 to between $38.5 million and $42.5 million on bookings of $75 million to $95 million. Overall, the company’s financial standings look solid, with cash liquidity of $365 million and minor debt of $18.30 million. Also, its enterprise value of $6.53 billion reflects good market value on a $6.82 billion market cap. The only predictable downside is the stock’s volatility, but it’s pretty much a given in a new and still unknown industry.

• Technological Advancements and Partnerships: In another step towards commercialization, IonQ has reported a $54.5 million agreement with the United States Air Force Research Lab to create quantum networking hardware. The company is partnering with institutions and companies, including the University of Maryland, Qubitekk, and AstraZeneca, to solidify its standing in quantum computing.

• Valuation Concerns: Some concerns over IONQ’s current valuation persist. The company’s price-to-book ratio of 14.36 is far greater than the industry’s 3.7. IonQ’s current market capitalization of $6 billion is already pretty significant, considering McKinsey estimates the quantum communication market at $36 billion by 2040. However, the company’s valuation is what investors are willing to pay and how they perceive its potential in the long term. Also, quantum computing is only taking its first steps, and to foresee how much this coming industry will be worth in 16 years is pretty stretched, at best.

What Is the Price Target for IONQ?

IONQ is a Strong Buy on Wall Street, with three Buys and one Hold. The average price target for IONQ stock is $19.23, reflecting a downside of 37.26% upside.

See more IONQ analyst ratings

Final Words

In a new tech industry that is destined to change the world, IonQ is one of the leading forces and is solidifying its position for the long term. The company has struck important collaborations with the U.S. Army, universities, and the private sector, all in the name of technological advancement. Recently, IonQ reached a breakthrough after it successfully entangled two separate ion qubits in a remote fashion. The valuation could cause some concerns, but the company’s operations are in line with its market cap, and it’s just too early to call how much this industry will be worth in 2040.