The Tiny Quantum Stock That Could Surge 35% per Year as AI Demand Explodes

I thought the term quantum computing sounded like science fiction technobabble the first time I heard it. It's something Captain Jean-Luc Picard would discuss aboard the Enterprise, not a real tangible thing.

But not only is quantum computing real, it's already forming its own revolution in computer science, and companies like IonQ (NYSE: IONQ) are the ones making this sci-fi fantasy into a reality. The stock price has increased at an annualized rate of 35% over the past five years, and I only see that continuing.

McKinsey reports that quantum computing could be worth as much as $72 billion by 2035, and it's no wonder when you consider artificial intelligence (AI) and its unique needs.

Quantum computing can lead to faster and more efficient AI training and operation. It can also help to optimize AI programs and allow AI to overcome traditional hardware limitations.

The main benefit of quantum computing is that it stands to make AI much more energy-efficient, which is important as data centers grow increasingly hungry for electricity and U.S. data center energy use could balloon to 9% of the country's total electrical consumption as soon as 2030. Integrating quantum hardware into AI programs could cut the energy consumption of AI data centers by 12.5% and their carbon emissions by nearly 10%.

With that in mind, it's worth explaining how a quantum computer works.

Image source: Getty Images

Let's break the laws of physics

Instead of the binary bits used by ordinary computers (like the one you're probably reading this on), quantum computers use quantum bits or qubits. Where a normal bit is either a 1 or a 0 (on or off, respectively), a qubit can be both a 1 and a 0 at the same time. Due to quantum physics essentially telling the conventional laws of physics to take a leap, a qubit becomes a 1 or a 0 only when it's observed. It exists as both and neither until then. Nobody is quite sure why they can do that; we just know that they do and how to make use of it.

While a normal computer retrieves, organizes, and stores information sequentially using bits, a quantum computer can do all three things at the same time and run multiple calculations at once.

That's why Alphabet's quantum computer, Willow, was able to solve a mathematical equation that researchers had been working on for 30 years in just five minutes. The most advanced conventional supercomputer out there would have taken 10 septillion years, many times longer than the age of the universe.

Now, most quantum computers also need very specific conditions to do what they do, like near-absolute-zero temperatures, a total vacuum, and electromagnetic shielding. The expertise to build, maintain, and use them doesn't come cheap, either, and the starting price for the industrial-grade ones starts in the $10 million range.

That has led to a crop of companies, like IonQ, that both make quantum computers and provide access to them through cloud platforms with a software-as-a-service (SaaS) model.

Strange technology, familiar model

Once you wrap your head around what a quantum computer is and how it works, IonQ's business model is very straightforward. A customer can either purchase quantum computing hardware from IonQ or rent access to one of its quantum machines through a SaaS model.

In that way, IonQ is really not too different from Salesforce or ServiceNow.

And unlike quantum physics, IonQ's results are very easy to understand.

For Q3 2025, the company exceeded the high end of its revenue guidance by 37% to hit $39.9 million, or 222% year-over-year growth. The company has also grown its cash reserves from $54.39 million at the end of 2024 to $346 million as of Sept. 30, 2025. And despite the fact that it's not profitable yet, IonQ has debt of only $28.5 million.

And critically for a young company, IonQ is locking down contracts and building a customer base of some major players.

For instance, in July 2025, the Oak Ridge National Laboratory and U.S. Department of Energy partnered with IonQ to demonstrate that IonQ's hybrid quantum-classical hardware could address issues around estimating power generation needs currently troubling the U.S. power grid and make the electrical grid more efficient.

On the business end, IonQ has also partnered with cloud companies like Microsoft and Amazon to help make its quantum-as-a-service model work. It also counts companies like Hyundai, GE Vernova, and Airbus among its customers, along with the University of Maryland.

Make no mistake, quantum computing is in its infancy, and any investment in IonQ should be considered speculative, but the potential here is enormous, and IonQ is a way to get in on the ground floor.

James Hires has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, IonQ, Microsoft, Salesforce, and ServiceNow. The Motley Fool recommends Ge Vernova and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.