Analysts Say Buy IonQ Stock, but Is Any Upside Really Left?

Business Insider

17 hours ago

IonQ (NYSE:IONQ) stands at the leading edge of quantum computing innovation, driven by a mission to tackle some of the world's most complex problems. Leveraging advanced trapped-ion technology –renowned for its high-fidelity operations and exceptional stability – IonQ is working to deliver highly accurate quantum processing with minimal errors. The company's vision extends to enabling secure quantum communication across a wide range of platforms, from satellites and ground stations to telecom networks and even battlefield drones.
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Although full-scale quantum capabilities are still years away, the tech has already attracted significant investor interest and plenty of that interest has been pointed at IONQ's direction; to wit, the shares have generated returns of 519% over the past year.
This bullish sentiment is echoed by Cantor analyst Troy Jensen, who acknowledges that IonQ is still in the 'very early innings of commercializing its technology' but sees ample reason for the enthusiasm. Jensen believes the company could capture 20% of the quantum hardware, software, and services market by 2035, translating to $1.5 billion in sales within a decade.
Much of Jensen's confidence is rooted in IonQ's distinct approach to quantum computing. Unlike companies focused on superconducting or photonic systems, IonQ uses individual atomic ions as qubits, which enables greater stability and precision. Its vertically integrated technology stack spans everything from chip design and production to cloud access via platforms like Amazon Braket, Microsoft Azure, and IonQ Cloud.
'This gives IonQ end-to-end control of its technology and provides faster feedback loops for R&D. Its unique architecture also allows programmability and modular scalability, critical for achieving near-term commercial advantage. IonQ's ability to fabricate room-temperature systems also eliminates the need for expensive cryogenic infrastructure,' Jensen explained.
Meanwhile, IonQ is shifting from R&D to generating real revenue, with 'accelerating traction.' In April, it secured a $22 million system sale to EPB to create the first U.S. quantum computing and networking hub. Its Forte Enterprise system is already deployed in data centers across the U.S. and Europe. There are also Partnerships with Toyota Tsusho, Ansys, and General Dynamics, extending its presence into the automotive, simulation, and defense sectors. Furthermore, collaborations with DARPA, AFRL, and Abu Dhabi's Quantum Research Center 'demonstrate IonQ's credibility in national security and frontier research.'
IonQ's ambitions don't stop at quantum computing. The company is making major investments in quantum networking, which it views as a crucial second business vertical. Through acquisitions of companies like ID Quantique (completed) and Lightsynq Technologies (pending), IonQ has gained key intellectual property and expertise in quantum memory, repeaters, and photonic interconnects – all vital components for building a quantum internet and linking quantum computers across data centers. As a result, IonQ is now among the select few with 'commercial momentum in both quantum computing and quantum-safe networking.'
Crucially, IonQ has the financial strength to back these ambitions. By the end of Q1, it held nearly $700 million in cash and equivalents, bolstered by a recent $373 million equity offering.
'The capital enables the company to aggressively invest in product development, global expansion, and strategic M&A (i.e., Lightsynq & Oxford Ionics),' Jensen said.
Given this array of strengths – from technology and partnerships to financial firepower – it's no surprise that Jensen initiated coverage of IONQ with an Overweight (i.e., Buy) rating. What is surprising, however, is that his $45 price target implies only a modest 1% upside from current levels. (To watch Jensen's track record, click here)
All told, IonQ's rapid share appreciation has left analysts hustling to keep pace. The current $43.33 average price target points to a minor pullback, yet the Strong Buy consensus, based on 5 Buys and 1 Hold, underscores that most on Wall Street remain solidly bullish. It will be interesting to see whether the analysts raise price targets or downgrade their ratings over the coming months. (See IONQ stock forecast)
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