IonQ is one of those quantum computing stocks that have become a multi-bagger in a matter of weeks. The company’s position in the quantum computing industry makes it a leader, but this leadership isn’t just about potential. The firm has the technology, the financial strength, and the right list of ‘friends’ to make the company an industry leader.
IonQ is a quantum computer producer based in the United States specializing in ion-trapping technology. This technology uses electromagnetic fields to restrain the movement of charged atomic particles. Think of it like a ball trapped in a box, unable to move because of the many forces acting on it from all sides.
Similar to other quantum computers, IonQ’s systems are made to tackle challenging issues like drug development, financial modeling, and chemical simulations. However, IonQ is more adaptable than other quantum computers because its technology enables stable qubit manipulation without the need for large cooling systems.
Its flagship products are IonQ Forte, a quantum computer that utilizes as many as 36 algorithmic qubits; and IonQ Harmony, a cloud-based quantum computing platform that utilizes up to 11 qubits. To clarify, a qubit is just like a bit that is either 0 or 1. The only difference is that the qubit is also able to have both 0 and 1 at the same time!
The company generates revenue via Quantum Computing as a Service (QCaaS), subscription-based access to quantum computing power; and direct sales of quantum processors. It also has partnerships with NKT Photonics, to develop next-generation laser systems for quantum computers, Amazon Web Services, to provide quantum computing capabilities through cloud services, and QuantumBasel, to expand its presence in Europe.
Its main competitor, Rigetti Computing (RGTI) also has similar deals. However, there is a massive difference in the way both companies operate. IonQ utilizes ’ion-trapping’ technology whereas RGTI focuses on superconducting qubits. Even though both companies have deals with the Big Tech companies, RGTI is essentially a competitor to them while IonQ is not. This is a huge advantage for the company as it can grow alongside these tech companies rather than waste its resources competing with them.
IonQ has also been able to convert these partnerships into successful implementations that solve real-world problems. It serves clients like AstraZeneca, Airbus, AWS, Lockheed Martin, and Hyundai among others. As a consequence, the company can generate revenue by easily monetizing its technology, something both Rigetti Computing (RGTI) and D-Wave Quantum (QBTS) don’t have the luxury of.
Lastly, the company has spent a huge amount of money on R&D in the last 10 years. $127 billion was spent in the last 12 months alone. When you combine that with the company’s first-mover advantage, you realize why the company is ahead of the rest of the pack. Due to this advantage, we are bullish on the stock and believe it will continue to be the market leader in the coming years.
IonQ Inc. is not on our latest list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held IONQ at the end of the third quarter which was 12 in the previous quarter. While we acknowledge the potential of IONQ as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as IONQ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
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