Why IonQ Stock Blasted Almost 23% Higher This Week
Key Points
The federal government has committed $2 billion to quantum businesses.
Although IonQ isn't included in this, the effort is a massive morale booster for companies across the sector.
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A massive, very powerful investor committed significant capital to the quantum industry this week, lifting sector stocks whether they were part of its initiative or not. IonQ (NYSE: IONQ) wasn't included, nevertheless market players traded the stock up on the back of that general buy-in. According to data compiled by S&P Global Market Intelligence, IonQ's shares rose by nearly 23% over the week.
2 billion reasons to like quantum companies
That investor is no less an entity than the U.S. Federal Government. On Thursday, the Department of Commerce (DoC) announced that it is committing $2 billion to direct investments in nine quantum companies.
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Image source: Getty Images.
Again, this select group doesn't include IonQ. Yet the firm commitment to advancing the technology from the public sector immediately and powerfully improved sentiment on nearly every quantum stock.
Another factor in IonQ's rise despite that exclusion is that, in a way, it puts the company a cut above those included peers. Earlier this month, it reported a first quarter in which it managed a 755% year-over-year improvement in revenue to an all-time high of almost $65 million, and secured its first 256-qubit system sale.
The highest level of support possible
To be sure, quantum still has quite some distance to go in its development as a technology; that goes double for the financial viability of the companies involved. But it's very encouraging that the Feds are putting their money where their mouths are; we can expect other forms of support -- financial or otherwise -- to boost the sector's players.
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Eric Volkman 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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