Why IonQ Stock Just Jumped
Key Points
D-Wave Quantum announced today that AT&T will use its annealing quantum computing technology.
AT&T is trying a variety of new technologies to improve its operations.
IonQ is not an immediate beneficiary of this news.
- 10 stocks we like better than IonQ ›
Quantum computing stock IonQ (NYSE: IONQ) jumped 8.4% through 11 a.m. ET Monday morning -- and it's got a competitor to thank for it.
This morning, rival quantum stock D-Wave Quantum (NYSE: QBTS) announced that AT&T (NYSE: T) has signed up to use D-Wave's technology "to address complex optimization challenges across its network operations."
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Quantum's getting popular
Crazily, D-Wave stock is up only 5.5% on the news -- but IonQ is up even more! Why might that be?
D-Wave says AT&T will apply its "annealing quantum computing technology" (which uses quantum physics to find optimal solutions to complex mathematical problems) to make AT&T's AI agents more efficient when optimizing data traffic and detecting network outages. AT&T is also evaluating other D-Wave technology to further improve its network, and says it has a "broader innovation strategy, which applies quantum computing, AI, automation, advanced analytics, and software-defined infrastructure to modernize how the network is built, run, and optimized."
And that might be a clue: AT&T isn't necessarily tying itself to D-Wave alone through this partnership, but is expressing interest in trying out a range of technologies, including different approaches to using quantum computing to improve its operations. This may have investors thinking that IonQ, too, might find an "in" with AT&T -- or with other telecommunications giants.
What this means for IonQ
Is this a reasonable assumption to make? Perhaps, but it smacks more of momentum traders hoping something good will happen for IonQ than of actual evidence that these good things are already happening.
That doesn't mean they're wrong to hope, of course. But with most analysts warning that IonQ remains years from profitability, I see no compelling need to jump on this momentum trade today. IonQ stock will probably remain volatile for years.
Should you buy stock in IonQ right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends IonQ. The Motley Fool has a disclosure policy.
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