Is IonQ Stock a Buy Now?

Key Points

• IonQ could work as a small speculative position, but the risk-reward balance doesn't justify a major investment today.

• The company trades at 422 times trailing sales, making even Nvidia's lofty valuation look cheap by comparison.

• IonQ is wisely using its inflated stock price to acquire companies without spending its limited cash reserves.

• 10 stocks we like better than IonQ ›

Quantum computing has been a hot topic since the fall of 2024. On the heels of major news in this high-tech industry, headlines and online searches on this topic even eclipsed the massive interest in artificial intelligence (AI). That's quite an accomplishment in this AI-centered economy.

The technology holds a ton of long-term promise. Eventually, quantum computers should be able to crack math problems that today's digital computers can't handle. From encryption and health research to financial analysis and cybersecurity, quantum computing will disrupt many industries forever.

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As a result, lots of investors want to get in on this exciting technology's biggest long-term winners while they're still small. According to Swiss investment bank UBS, quantum computing could generate annual sales of $20 billion by the year 2030, with companies earning a total market capitalization of at least $300 billion. As of Sept. 23, the four largest pure-play quantum computing stocks add up to a $43.7 billion market value.

The largest name in that group is IonQ (NYSE: IONQ), sporting a $22.1 billion market cap. The stock skyrocketed last year, calmed down for a while, and got back to exploring fresh all-time highs this month.

Is IonQ just getting started on a massive wealth-building growth story, or is the stock just wildly overheated right now?

Let's find out.

IonQ's financials are scarier than a quantum physics exam

Until recently, most of IonQ's massive stock gains had nothing to do with business results. In fact, these financial statements are grim reading.

With $52.4 million of trailing revenues and $419.3 million in operating expenses, the company is deeply unprofitable. IonQ has financed its operations with proceeds from the initial public offering (IPO) in 2021, but has burned through nearly half of the $636 million IPO stash so far. The company's balance sheet currently holds enough cash equivalents to get through the next two years -- but IonQ keeps burning more cash every year.

Instead, IonQ investors have celebrated technological advances with share price pops. Most of these steps forward were taken in some other company's labs, including Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and IBM (NYSE: IBM). It's great to have some of the brightest research teams on the planet pushing quantum computing tech toward store shelves and usable systems -- but they are also scary mega-rivals in the same business space.

September was a busy month for IonQ

IonQ's most recent price jumps have been different, though. The company has taken several big steps forward in September.

The surge started on Sept. 10, when IonQ started a new business unit aimed at securing Federal contracts. IonQ already has a few agreements with federal entities such as the U.S. Air Force and Oak Ridge Labs. The unified front of IonQ Federal should help the company find deeper government relationships over time and coordinate its contract-seeking efforts.

Then, IonQ got British regulatory clearance for the proposed buyout of Oxford Ionics. The $1.1 billion stock-based deal closed quickly. IonQ is making the most of its red-hot stock -- this was the fourth share-based buyout to close in 2025.

And the momentum kept going last week, as IonQ committed to researching quantum computing in space, supporting a broader project by the U.S. Department of Energy.

IonQ has plenty of business irons in the fire right now. To keep the fires burning, management is taking advantage of its soaring stock price to grow its research teams and patent portfolios without spending precious cash.

Why I'm watching IonQ from the sidelines

So this little company is going places. IonQ hopes to have a powerful quantum computing system with 2 million reliable qubits by the year 2030, opening the door to commercial success.

If the company can deliver on that promise, early IonQ investors could be in for a treat. However, I see a couple of problems here.

• 2030 is a long way off and many things can change before then. Today's promising quantum physics research project could be a bust, undermining IonQ's viability in the long run. Sure, there might be positive surprises too -- they're just far less likely.

• With a $23.2 billion market cap, IonQ is already valued like a large company. The stock trades at 422 times trailing sales. It makes market darlings like Nvidia (NASDAQ: NVDA) and Palantir Technologies look affordable by comparison, trading at respective price-to-sales ratios of 27 and 126.

IonQ's looming business risks and soaring stock valuation add up to a simple conclusion: I don't recommend picking up this stock today.

Perhaps I'll regret sitting on my hands when IonQ completes its million-qubit system and starts making Nvidia-like profits. But investing is essentially an exercise in statistics, and I like my chances just fine here on the sidelines. I know I said that 2030 is far off, but this kind of game-changing research could take decades. So, the 2030 system deadline looks too quick, and larger rivals seem better equipped to reach that goal anyway.

So if you want to make serious investments in the future of quantum computing, I'd suggest going with tech titans like Alphabet, Nvidia, or IBM. IonQ could be a fun, speculative holding in a diversified portfolio, as long as you keep that initial investment fairly small.

Should you invest $1,000 in IonQ right now?

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Anders Bylund has positions in Alphabet, International Business Machines, and Nvidia. The Motley Fool has positions in and recommends Alphabet, International Business Machines, Nvidia, and Palantir Technologies. The Motley Fool has a disclosure policy.