In This Article:
Key Points
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The company's CEO told a major investment publication it expects to be the "Nvidia" of quantum computing.
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However, IonQ is currently very far from that, and has more competitors than Nvidia did.
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Today's action feels like a short squeeze based on hype.
Shares of quantum computing company IonQ (NYSE: IONQ) skyrocketed 37% on Thursday, after CEO Niccolo de Masi sat down with Barron's for an interview. During the interview, he outlined a lofty goal for the company, and even said that IonQ would be the "Nvidia" of quantum computing.
However, a mere aspirational comment like that shouldn't put this speculative stock up by this much. Delving into the interview, there really wasn't anything tangible to warrant this kind of stock price increase.
An Nvidia mention gets you far
As we've seen over the past two years, whenever a stock is compared with Nvidia or has been shown to have received an investment from or partnership with the company, speculators tend to pile in. This happened just last week with respect to newly public "neo-cloud" CoreWeave, which skyrocketed after it was disclosed Nvidia had increased its position in the stock.
However, that can be a double-edged sword. After all, SoundHound AI plunged earlier this year when it was disclosed Nvidia had sold its entire stake in the company. SoundHound's stock hasn't recovered.
In the Barron's interview, De Masi said of the quantum computing industry: "I believe IonQ will be the Nvidia player. There will be other people that copy us and follow us; they have always copied and followed us."
No doubt, IonQ was the first publicly traded quantum stock, with IonQ's strategy focused on early commercialization through its trapped-ion process. Meanwhile, other competitors have taken other approaches they believe will ultimately win out, but may take longer to commercialize.
Later in the interview, de Masi predicted that someone would "pay hundreds of billions of dollars to buy IonQ," because he anticipates a major cloud computing provider will want IonQ's quantum technology in-house as a differentiator.
Given that the company's market cap was only around $8.75 billion heading into today, it's perhaps not surprising the stock is seeing a big surge on those comments.
But there's no "there" there -- yet
Investors should be very cautious of any quantum computing stock, and especially of chasing one on a day like today. For all of de Masi's talk, IonQ only generated $7.6 million in revenue last quarter, with a $32.3 million loss.