What Sent IonQ Shares Surging and Whether the Momentum Can Last

IonQ (NYSE: IONQ), an early mover in the nascent quantum computing market, went public through a merger with a special purpose acquisition company (SPAC) on Oct. 1, 2021. Its stock started trading at $10.60, experienced wild swings, and now trades at about $43. Let's see why IonQ's stock more than quadrupled, and if it can maintain that momentum.

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Why did IonQ's stock soar?

Quantum computers can process certain tasks much faster than classical computers, but they're also bigger, pricer, consume more power, and output a higher percentage of errors. But as these systems become smaller, more efficient, and more accurate, they can be used for a wider range of mainstream computing applications instead of niche government and research projects.

Unlike older quantum systems, which accelerate electrons through superconducting loops to achieve a quantum state, IonQ traps and manipulates individual ions with tiny lasers. That ion-powered process generally has a higher gate fidelity (accuracy) than older electron-based systems, and it doesn't require the entire quantum system to be cryogenically cooled.

Those improvements helped IonQ secure more commercial and government contracts. The rapid growth of its government business also prompted it to create a new unit, IonQ Federal, to handle all of those contracts last year. IonQ has launched four quantum systems to date, which it sells and leases to research institutions. Still, most of its revenue comes from its cloud-based quantum computing platform, which allows customers to remotely access those systems.

From 2021 to 2025, IonQ's revenue surged from $2 million to $130 million. Analysts expect its revenue to rise more than fivefold to $652 million by 2028 as its quantum processing power significantly increases and it expands its higher-growth government and enterprise businesses. Those rosy estimates drove a stampede of bulls toward IonQ's stock, even though the company is still deeply unprofitable and already trades at 23 times its projected 2028 sales.

Can IonQ maintain its momentum?

A lot of growth is already priced into IonQ's stock, but it still has plenty of irons in the fire. The global computing market could expand at a 33% CAGR from 2026 to 2034, according to Fortune Business Insights, and IonQ remains one of the top plays on that booming market.

However, fears of interest rate hikes and other macro headwinds could limit its near-term gains or even drive its stock lower through the end of this year. So while IonQ is still one of the best long-term plays on the quantum computing market, investors shouldn't be surprised if its stock takes a breather until the macro environment warms up again.

Leo Sun 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.