Artificial intelligence stocks proved popular over the past year, and the next hot sector could be quantum computing. After all, quantum computers can perform calculations at speeds far beyond the abilities of today's supercomputers. The use of subatomic particles allows this, yet is also the source of struggles to scale the technology.
But according to Microsoft executive Mitra Azizirad, "We are at the advent of the reliable quantum computing era." In a blog post, she marked 2025 as the "year to become quantum ready," and urged organizations to prepare themselves "to harness the full power of quantum as it scales."
A number of businesses are racing to perfect the technology, Microsoft included. But among pure-play quantum companies, IonQ(NYSE: IONQ) may be a top investment opportunity. Its stock is up a whopping 270% over the past 12 months through the week ending Jan. 24.
Here's a look into IonQ to help you assess if it's a worthwhile investment in 2025, which happens to mark the 100th anniversary of quantum mechanics.
IonQ's technological strengths
What sets IonQ apart from its many rivals in the quantum computing space is its technology. Quantum computers typically require temperatures colder than outer space to keep the subatomic particles stable enough to minimize calculation errors. However, IonQ's systems can operate at room temperature.
In addition, while a single quantum device is powerful, today's computers enable advances such as AI by networking multiple machines together. To achieve the same benefit for its systems, in November, IonQ announced the acquisition of Qubitekk, a specialist in quantum computer networking.
Also, last year IonQ's quantum computers achieved 99.9% accuracy. This milestone was essential to the company's ability to expand its customer base.
Speaking of customers, IonQ possesses an impressive clientele. It signed a $54.5 million contract with the U.S. Air Force Research Lab in September to deliver quantum computer networking capabilities.
Additional customers include Hyundai Motors and Airbus. The former is using IonQ's tech to build self-driving vehicles, while the latter is looking to quantum computers for cargo optimization and other operational efficiencies.
IonQ's financial performance
Its customer acquisitions enabled IonQ to achieve 102% year-over-year revenue growth in the third quarter, hitting $12.4 million. The quantum computing provider expects at least $38.5 million in 2024 full-year sales. That would be a 75% increase over 2023's $22 million.
Its financial stability is illustrated by IonQ's outstanding Q3 balance sheet. Assets totaled $497.9 million compared to $62.2 million in total liabilities. Q3 cash, cash equivalents, and investments were $382.8 million, which allows the company to cover expenses, as well as invest in its business.
That said, IonQ is not profitable. Its Q3 net loss was $52.5 million. Worse, this is an increase from 2023's net loss of $44.8 million. While many high-growth tech companies prioritize business expansion over profits, ideally, you want to see net losses decline over time.
To buy or not to buy IonQ stock
Although IonQ is operating at a loss today, CEO Peter Chapman said in January, "We believe that IonQ will be profitable, with sales approaching $1 billion, by 2030."
That's a bold prediction. For IonQ to go from estimated revenue of $38.5 million in 2024 to $1 billion by 2030 would be astronomical growth, and a boon to shareholders. Of course, a lot can happen between now and 2030, so you have to take Chapman's prediction with a grain of salt.
Healthy skepticism is necessary given quantum computing is still in its infancy. Some estimates predict the industry won't get past its current challenges, such as scaling quantum machines while limiting calculation errors, until 2030.
Also, many competitors, including Microsoft, are jockeying for a piece of the market. IonQ is doing well so far, but since its initial public offering was in the fall of 2021, its history as a public company is brief. How the company will fare over the long term is uncertain as competition heats up.
Because of these factors, IonQ is a speculative stock to buy in 2025. While I believe the company will have a solid year given the progress it's made to date, such as the Qubitekk acquisition, buying shares in this quantum computing provider is only for investors with a high risk tolerance.
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Robert Izquierdo has positions in IonQ and Microsoft. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
