Forget IonQ: This Quantum Computing Stock Is a Better Buy

Quantum computing is hot, hot, hot, with the Defiance Quantum ETF (NASDAQ: QTUM) up 40% year to date and trading near its all-time high. And yet investors are starting to sour on one quantum computing stock in particular: IonQ (NYSE: IONQ).

From early January 2025 through about mid-October, shares of IonQ nearly tripled in price. But since mid-October, IonQ's stock price has been cut by one-third, falling to $52 and change at the close on Dec. 5.

Image source: Getty Images.

Quantum successes...

What's ailing IonQ? A leader in trapped-ion quantum computing, which can operate at room temperature and does not require cold for superconduction, IonQ's fatal flaw as a stock -- in my opinion -- is the fact that it's basically still just a research and development shop.

IonQ's technology is certainly whiz-bang, and the company boasts powerful-sounding benchmarks such as "world-record 2 cubic gate fidelity of 99.99%." That's great from a science experiment perspective, but when it comes to IonQ's attractiveness as a business, I'm more interested in how much money the company can make.

Unfortunately for quantum investors, for both the time being and for the foreseeable future, the answer to that question seems to be: zero.

... and quantum travails

Don't get me wrong. IonQ has made significant progress, growing its revenue from the single-digit millions (four years ago) to nearly $80 million today. The problem is that the more IonQ's revenue grows, the more money it seems to lose.

Net losses that were just a hair over $100 million four years ago have grown 14 times in size, to just under $1.5 billion, over the last 12 months. Analysts polled by S&P Global Market Intelligence don't see IonQ turning profitable as far out as anyone's willing to make estimates (2030). Meanwhile, IonQ is burning through nearly $260 million a year, and only has $1.1 billion in the bank -- meaning it's on course to run out of money before reaching breakeven.

This may be a great way to do science -- but it's a lousy way to run a business.

A better quantum stock than IonQ

But if not IonQ, what's a better way to invest in quantum computing? Might I suggest investing in a company that's got more cash than it knows what to do with -- and certainly enough to fund its quantum research for as long as it takes to make reliable quantum computing a reality?

Last year, Google-owner Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) made headlines when its Willow quantum computing chip proved to be arguably the fasted quantum computer in the world, completing a computation that would take the fastest supercomputers in the world 100,000,000,000,000,000,000,000,000 years to solve ... in just five minutes.

Granted, even Alphabet admits it's only at "step two" along a "six-step timeline" toward creating a reliable quantum chip, so this is still a work in progress. Crucially, though, Alphabet has the financial muscle to go the distance. Thanks to its multiple other successful, cash-producing businesses, Alphabet boasts nearly $100 billion of cash in the bank, and $73.5 billion in new free cash flow rolling in every year.

That's enough money for Alphabet to win the quantum race itself ... or buy anybody who beats it to the finish.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and IonQ. The Motley Fool has a disclosure policy.