With quantum computing on the rise, IonQ (IONQ) stock looks promising

Quantum computing is destined to transform our world, and companies like IonQ (IONQ) are bringing us one step closer to the world of science fiction. Imagine (like the title of a 1932 science fiction film) 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, that’s exactly what quantum computing promises.

In an early article about IBM’s (IBM) ambitions in this matter, I referred to quantum power as Sauron’s ring and the potential of this technology to solve unsolved problems. Well, of course that hasn’t changed. This new technology is the next goal for scientists and dreamers alike. It’s no wonder that investors are enthusiastically and closely following every move in this evolving industry.

In short, quantum computing uses the principles of superposition and entanglement instead of the binary method that computers currently use. It can perform calculations at unimaginable speeds, potentially impacting almost every known industry, from biology and physics to treatment discovery and data centers. If AI has influenced most industries today, quantum technology threatens to do the same. It will be like stepping into a science fiction film where the impossible becomes possible.

Like IBM, IonQ is currently one of the leading providers and is therefore generating positive feedback from its investors. The company has established key partnerships with the U.S. Army, academia and the private sector. It recently made a key breakthrough, showing remote ion-ion entanglement that captures two separate ion qubits and creates a connection between them. This is the necessary foundation for quantum computing.

At this point, IONQ’s prospects are promising, despite valuation concerns from some analysts. But it’s just the beginning, and as the song says: “The road is long…”

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

• Financial performance and market position: IonQ’s third-quarter revenue beat expectations, sending the stock up over 268% in the last 90 days. The company announced $63.5 million in new bookings and provided new guidance for its 2024 revenue outlook at $38.5 million to $42.5 million on bookings of $75 million to $95 million . Overall, the company’s financial position looks solid, with cash of $365 million and low debt of $18.30 million. Furthermore, the enterprise value of $6.53 billion reflects a good market value with a market capitalization of $6.82 billion. The only foreseeable downside is the stock’s volatility, but that’s pretty much a given in a new and still unknown industry.

• Technological advances and partnerships: In another step toward commercialization, IonQ announced a $54.5 million agreement with the United States Air Force Research Lab to develop quantum networking hardware. The company is working with institutions and companies including the University of Maryland, Qubitekk and AstraZeneca to consolidate its position in quantum computing.

• Valuation concerns: Some concerns remain regarding IONQ’s current valuation. The company’s price-to-book ratio of 14.36 is well above the industry’s 3.7. IonQ’s current market cap of $6 billion is already quite sizable considering McKinsey estimates the quantum communications market to be $36 billion by 2040. However, the company’s valuation depends on what investors are willing to pay and how they view its long-term potential. Plus, quantum computing is just taking its first steps, and predicting how much this upcoming industry will be worth in 16 years is pretty much an exaggeration 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, representing a downside potential of 37.26%.

See more IONQ analyst reviews

Last words

In a new technology industry destined to change the world, IonQ is a leading force and is consolidating its position for the long term. The company has established key collaborations with the U.S. Army, universities and the private sector in the name of technological advancement. Recently, IonQ achieved a breakthrough after successfully entangling two separate ion qubits together in a remote manner. The valuation might raise some concerns, but the company’s operations are commensurate with its market cap, and it’s simply too early to say how much this industry will be worth in 2040.