Brett Schafer, The Motley Fool
5 min read
In This Article:
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IonQ's stock has soared along with investor enthusiasm for quantum computing.
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The company has minimal revenue and huge operating losses.
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Like other hyped-up technology themes, quantum computing stocks are likely to perform poorly over the long haul.
Science fiction is slowly turning into science fact. At least, that's what it looks like when we have self-driving cars, humanoid robots, and now quantum computers emerging into the limelight. Researchers predict that quantum computing will create $850 billion in economic value by 2040, and investors are scooping up shares of quantum computing stocks like they're going out of style. IonQ (NYSE: IONQ) is up over 300% in the last 12 months as of this writing, making huge gains for shareholders.
Is now the time to hop on the IonQ train and ride the quantum computing revolution? The answer is more complicated than you think.
We can easily understand why society would value self-driving cars or humanoid robots. They take work previously done by humans and offload it to machines, allowing people to have more leisure time. But why would we want quantum computers?
A simple answer: They promise unprecedented speeds in advanced computations. Traditional semiconductor-based supercomputers can take hours or even days to finish calculations in advanced mathematics, artificial intelligence (AI), or simulations. Quantum computers use quantum mechanics to do these calculations in just a few seconds, potentially saving time and money in the process. This could provide an immense value to society and revolutionize the entire computer industry, from personal devices to the cloud.
It sounds great, but working out the kinks in this technology has proven remarkably difficult. That is where researchers like IonQ step in. The company is slowly building quantum computers for commercialization and selling supplies to other research teams to help work on their own quantum research. It has even started selling its quantum computing services over the public cloud providers, although there are still a lot of errors to fix with the technology.
If IonQ can win the race to quantum computing supremacy and commercialize the technology, there is a ton of promise for this business. This is why investors have bid up the stock to new heights and its current market cap of $8.6 billion.
Since it's an early stage start-up trying to build a new technology in public markets, IonQ does not have the prettiest financials. It generated just $7.6 million in revenue last quarter and lost $75.7 million. The company's operating loss has gotten worse for many years now and will likely continue to worsen as it pours more research into quantum computing.
