Is IonQ a Buy?

Quantum computing expert IonQ (NYSE: IONQ) is riding a Wall Street roller coaster these days. After trading largely sideways in their first three and a half years on the stock market, IonQ shares skyrocketed from $6.22 in early September 2024 to a $54.74 peak three months later. Fast-forward from early January to March 25, and IonQ's stock has dropped 53% lower to $25.55 per share.

Is the next-generation technology developer a buy at these lower share prices, or were the earlier gains too high, too fast?

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Let's take a look.

Google's quantum breakthrough sparked IonQ's wild ride

Last fall's skyrocketing price climb was not a direct result of IonQ's own actions. Fellow quantum computing expert Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) took an important step forward in the long journey to commercially useful quantum computers. Its Willow chip added a game-changing error correction function to the technology platform, reaching the second milestone in the Google Quantum AI research group's six-step road map. This particular improvement came four years after the first quantum calculation that couldn't be easily done with a classic digital system.

That's great stuff and a necessary achievement, but the Google team is nowhere near delivering a "large error-corrected quantum computer" that can crack advanced encryption algorithms and explore DNA sequences in new ways. The head-turning detail in the Willow report wasn't the crucial error correction step. It was the fact that Willow could perform a basic quantum computing task in five minutes that would take 10 septillion years to simulate with today's fastest digital supercomputers.

Again, that's great. Willow proved that it actually is a quantum computer and can complete simple benchmark tasks on a reasonable time scale. The fact that it would take essentially forever to do the same thing with an old-school supercomputer only proves that the quantum researchers know how to optimize computing problems for their particular machine type.

But that didn't matter. Headline writers and investors alike focused on the "septillion years" factoid, igniting a frenzy in pure-play quantum computing stocks. As the largest name in that group, IonQ rode that wave to the top. Smaller rivals D-Wave Quantum (NYSE: QBTS) and Quantum Computing (NASDAQ: QUBT) soared even higher:

QUBT data by YCharts

Nvidia brought a reality check in January

Some of the soaring gains faded away in the first quarter of 2025, as the CEO of fellow quantum computing expert Nvidia (NASDAQ: NVDA) said it could take 20 years to make a useful computer with this technology. Yes, Nvidia -- the artificial intelligence titan is working on ways to control quantum computing systems with connections to a digital computer. This way, developers can get the best of both worlds and simplify the programming of quantum systems.

That statement took the wind out of IonQ's sails and started a heated debate. Other companies have presented potentially game-changing advances in the ten weeks since then, but I'm not so sure that the whole quantum computing industry suddenly reached a bunch of dream-like goals at the same time. There's probably a fair amount of marketing spin to these announcements, which may turn out to be completely normal and relatively minor advances in the big picture.

So the market for quantum computing stocks remains in a weird state (kind of appropriate for a technology that relies on weird states of advanced materials). Most of the pure-play quantum computing stocks are still cooling down, but they're also floating on sky-high valuations. If you thought Nvidia stock looked expensive at 22.6 times trailing sales, you ain't seen nothin' yet:

Data collected from Finviz.com on March 25, 2025.

IonQ might be the least risky quantum pure-play stock (but that's not saying much)

It's too early to pick long-term winners in the quantum computing race -- especially among the industry-specific specialists that don't come with trillion-dollar market caps and equally massive research budgets.

To be fair, IonQ has the advantage of a fairly long business history, and has actually shipped a few systems to paying customers. But it's similar to betting on a hot biotech with a promising cancer treatment under development. Many of those potentially groundbreaking research projects end up going nowhere, leaving those daring early investors with nothing but a bag full of air and broken promises.

I don't know for sure that this will happen to IonQ or any of its fellow upstarts, but it's a very real risk. I definitely wouldn't build stock positions in D-Wave or Quantum Computing at this point. IonQ is the largest and most stable option, but that's like calling cucumber the saltiest vegetable. If you insist on buying a specialist quantum computing stock in this strangely overheated market, IonQ would be the only semi-reasonable option.

But if you do that, make sure you're only betting money you can afford to lose and give some serious consideration to proven winners like Alphabet and Nvidia first. The quantum computing segment is actually full of world-class tech titans already.

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. Anders Bylund has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool has a disclosure policy.