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Is IonQ the Top Quantum Computing Stock to Buy Now?

Source The Motley Fool

Quantum computing investing was all the rage in late 2024 after Alphabet's Google's Willow Chip took the world by surprise. This chip's breakthrough caused many investors to flock to quantum computing stocks, and many, like IonQ (NYSE: IONQ), posted unbelievable gains in just one month.

Nvidia CEO Jensen Huang threw cold water on this hot movement, recently, stating that "useful" quantum computing could be 15 to 30 years away. That's just too long of a time frame for investors, and it caused this industry to sell off.

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However, IonQ has rebounded from the fall, sitting around 20% off of its all-time high after being down nearly 50%. With that kind of jump, it's clear that investors have a lot of faith in IonQ. But is it still a buy?

IonQ's CEO thinks useful quantum computing will be here much quicker

One catalyst that helped quantum computing stocks rebound after Huang's comments was that Nvidia planned a quantum day at its annual GTC 2025 conference, leading some to believe that quantum computing may be closer to relevance than Huang originally believed.

IonQ is one of the leaders in this space and has some of the largest quantum computing contracts. It signed a $54.5 million contract with the U.S. Air Force Research Lab, which was the largest quantum computing contract signed in 2024. These contracts are key, as IonQ isn't a profitable business, so it needs outside funding to fuel the company while it develops commercially viable products.

After Huang's comments, IonQ CEO Peter Chapman issued a statement that its current #A36 Forte Enterprise systems are already providing solutions for clients, meaning that it's not just a novel technology anymore, but something that's truly useful. He believes quantum computing will provide significant use in the artificial intelligence (AI) realm and far outperform the AI that's being developed on today's classical computing techniques.

Chapman noted that 2024 results would be on the high end of guidance, and that 2025 looks extremely promising. Lastly, he made the bold projection that IonQ will be profitable, with sales of around $1 billion by 2030. Obviously, that's the bull case, as it's coming from a CEO who stands to benefit greatly from the proliferation of quantum computing. But does that mean investors should take his word for it?

IonQ has a lot of success baked into the stock price already

Let's say IonQ meets that goal of $1 billion in revenue and profitability by 2030. We don't know what kind of profit margin Chapman is talking about, so let's just assume 20% for now.

IONQ Revenue (TTM) Chart

IONQ Revenue (TTM) data by YCharts

If IonQ hits those goals by the end of 2030, IonQ's stock will be trading for 43 times its 2030 earnings. While that doesn't seem like a bad price tag, you must remember that you'd have to hold the stocks for the next six years to reach that level. There are bound to be a lot of significant market movers between now and then, so the opportunity cost of holding IonQ's stock could become an issue.

So, with the CEO's bull case for the company only yielding an OK stock investment, I'd say that investors may be better off picking some other quantum computing stocks.

For me, I'm getting my exposure to the industry through owning tech giants like Nvidia and Alphabet, which are also heavily investing in quantum computing. With these two, if quantum computing takes longer than expected to reach commercial relevancy, they still have a strong base business that will continue providing excellent returns. With IonQ, it's an all-or-nothing bet.

All-or-nothing bets need to have great odds in your favor to make sense, but with how high IonQ's stock price is right now, I don't think the odds are in investors' favor. As a result, I think anyone looking to be exposed to the quantum computing realm should check out some of the more established big tech players for less risk.

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

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool has a disclosure policy.

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

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