Mitrade Insights is dedicated to providing investors with rich, timely and most valuable financial information to help investors grasp the market situation and find timely trading opportunities.

2021

Best News & Analysis Provider

FxDailyInfo

2022

Best Forex Educational Resources Global

International Business Magazine

Insights

News

How IonQ Stock Gained 18% Last Month

Source The Motley Fool

Shares of IonQ (NYSE: IONQ) rose 17.8% in September 2024, according to data from S&P Global Market Intelligence. The quantum computing pioneer was having a quiet month for the most part, but its stock chart skyrocketed on potentially game-changing news in the last week. That's where IonQ signed a substantial contract with the U.S. Air Force Research Lab (AFRL).

Major military contract boosts IonQ's research efforts

The AFRL deal is a four-year agreement worth $54.5 million. It's IonQ's largest contract of 2024, bringing the year-to-date order bookings to a total of $72.8 million.

The company will collaborate with the AFRL to make quantum computing more scalable and easier to deploy. Quantum computing systems are fundamentally different from digital computers, making it difficult to integrate quantum systems with the existing digital infrastructure. In particular, the two organizations will address compatibility with current networking infrastructure.

IonQ took advantage of this announcement's media spotlight, adding plenty of bullish boilerplate. CEO Peter Chapman reminded investors that IonQ is growing faster than any other pure-play quantum computing company and highlighted the company's development deals with other groups. The press release reads like a brief overview of IonQ's business prospects.

The stock gained 28% over the next two days.

Risky business in an exciting market

The AFRL contract is a big step forward for IonQ, and the quantum computing industry should benefit from this effort to integrate new computing methods with existing technologies. At the same time, it should be said that IonQ remains a speculative investment with uncertain long-term prospects.

The company reported a $49 million operating loss in the second quarter of 2024 on $11 million in top-line revenues. I know it's early, but that's not a sustainable business model in the long run.

It works for a while when you have solid cash reserves, and IonQ is doing fine from that perspective. The balance sheet has $370 million of cash and short-term investments, mostly culled from the initial public offering in 2021. At the same time, the company is burning through that reserve with $124 million of negative free cash flow per year.

The AFRL contract announcement had some uncomfortable overtones, too. For example, the company presented its high-octane growth in a narrow context:

"No other publicly traded pure-play quantum computing company has nearly doubled revenue each year since going public," Chapman said. This statement excludes the entire categories of privately held quantum computing experts and larger companies in many other business areas. The company really is outgrowing the remaining handful of rivals, but I think it may be dangerous to ignore the looming shadows of deep-pocketed tech titans.

And the stock itself is risky business. Share prices are nestled almost exactly midway between a 52-week low of $6.22 and high of $16.60 per share. Investors are grabbing shares of a deeply unprofitable business at 63 times sales.

Please check your risk tolerance before buying your first IonQ stub. Quantum computing may be a game-changer, but there are safer and more sensible ways to invest in this emerging market.

Should you invest $1,000 in IonQ right now?

Before you buy stock in IonQ, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and IonQ wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $728,325!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 30, 2024

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

Recommended Articles

Fed hike odds near 90% into Wednesday's decision — how to trade the dollar, gold and the S&P 500 A 0.3% monthly core CPI print has lifted the market-implied probability of a 25bp Fed hike on 16 September to roughly 86.5% ~ 90%, which would be the first increase since July 2023. Here is the decision timeline, the pricing versus the forecasts, both scenarios, and the key levels for the dollar, gold and the S&P 500.

Author Suzie

Sep 14, Mon

A 0.3% monthly core CPI print has lifted the market-implied probability of a 25bp Fed hike on 16 September to roughly 86.5% ~ 90%, which would be the first increase since July 2023. Here is the decision timeline, the pricing versus the forecasts, both scenarios, and the key levels for the dollar, gold and the S&P 500.

Gold falls below $4,300 as higher US yields bolster Fed rate hike bets Gold price (XAU/USD) tumbles to near $4,295 during the early Asian session on Tuesday. The precious metal faces some selling pressure as rising bond yields and surging energy prices strengthen expectations that the US Federal Reserve (Fed) will raise interest rates this week.

Author FXStreet

Yesterday 01: 23

Gold price (XAU/USD) tumbles to near $4,295 during the early Asian session on Tuesday. The precious metal faces some selling pressure as rising bond yields and surging energy prices strengthen expectations that the US Federal Reserve (Fed) will raise interest rates this week.

【Daily Brief】10-year Treasury yield briefly tops 5%, S&P 500 slips to 7,602 and the dollar firms at 99.3 as the Fed's decision eve begins The 10-year Treasury yield touched 5.014% on Monday — its first print above 5% since October 2023 — while the S&P 500 closed 0.48% lower at 7,619.98 and the dollar index firmed to 99.3. Here is the full market wrap ahead of Wednesday's FOMC decision, the dot plot and the August retail sales report, plus today's CLARITY Act Senate vote.

Author Irene Q.

Yesterday 08: 16

The 10-year Treasury yield touched 5.014% on Monday — its first print above 5% since October 2023 — while the S&P 500 closed 0.48% lower at 7,619.98 and the dollar index firmed to 99.3. Here is the full market wrap ahead of Wednesday's FOMC decision, the dot plot and the August retail sales report, plus today's CLARITY Act Senate vote.

Silver breaks $64 as precious metals rebound — can gold hold the $4,280 line into the Fed decision?Silver has climbed back above $64 an ounce for the first time this week, leading a broad rebound across precious metals hours before the Federal Reserve delivers what is expected to be its first rate hike since 2023. Spot silver was last at $64.64, up 1.49% on the day, while gold reclaimed $4,300 and platinum and palladium both advanced. The question now is whether the bounce is a genuine turn — or a pause before the Fed's dot plot decides the next move.

Author Suzie

7 hours ago

Silver has climbed back above $64 an ounce for the first time this week, leading a broad rebound across precious metals hours before the Federal Reserve delivers what is expected to be its first rate hike since 2023. Spot silver was last at $64.64, up 1.49% on the day, while gold reclaimed $4,300 and platinum and palladium both advanced. The question now is whether the bounce is a genuine turn — or a pause before the Fed's dot plot decides the next move.

Bitcoin falls below $75,000 as the CLARITY Act fails in the Senate — what the vote means for crypto The US Senate blocked the Digital Asset Market CLARITY Act in a 49-50 procedural vote, sending Bitcoin briefly below $75,000 — its biggest one-day drop since June. Ethereum fell more than 8%, Coinbase slid 10% and $75 billion of crypto market value evaporated. Here is what the vote was, why it failed, and the levels that matter now.

Author Suzie

6 hours ago

The US Senate blocked the Digital Asset Market CLARITY Act in a 49-50 procedural vote, sending Bitcoin briefly below $75,000 — its biggest one-day drop since June. Ethereum fell more than 8%, Coinbase slid 10% and $75 billion of crypto market value evaporated. Here is what the vote was, why it failed, and the levels that matter now.

Popular Symbols