Institutional Investors Abandon Quantum Computing Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy IONQ?
Source: Fool
- Declining Institutional Holdings: According to WhaleWisdom.com, the percentage of shares held by institutional investors in IonQ, Rigetti Computing, and D-Wave Quantum has decreased, with IonQ dropping from 57.35% to 54.71%, indicating a loss of confidence that could hinder future financing opportunities.
- Shareholder Dilution Impact: IonQ's $2 billion equity offering in October diluted existing shareholders, leading to a decline in institutional ownership percentage despite an increase in the number of shares held, reflecting market concerns about its long-term business model viability.
- Uncertain Market Outlook: While quantum computing is seen as a potential trillion-dollar market, with analysts predicting global economic value of $450 billion to $850 billion by 2040, there is currently little evidence of widespread adoption, which may dampen investor enthusiasm in the sector.
- Increased Bubble Risk: Historical data shows that quantum computing stocks have TTM price-to-sales ratios exceeding 30, often indicating bubble conditions, and combined with current skepticism about quantum computing, the sector may face significant bubble-bursting risks.
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Analyst Views on IONQ
Wall Street analysts forecast IONQ stock price to rise
12 Analyst Rating
9 Buy
3 Hold
0 Sell
Strong Buy
Current: 30.780
Low
47.00
Averages
75.91
High
100.00
Current: 30.780
Low
47.00
Averages
75.91
High
100.00
About IONQ
IonQ, Inc. is engaged in the quantum computing and networking industry, delivering high-performance systems capable of solving complex commercial and research use cases. Its generation quantum computers, IonQ Forte and IonQ Forte Enterprise, are cutting-edge systems, boasting 36 algorithmic qubits. It sells specialized quantum computing and networking hardware together with related maintenance and support. It also sells access to several quantum computers of various qubit capacities and is in the process of researching and developing technologies for quantum computers with increasing computational capabilities. It makes access to its quantum computers available via three cloud platforms, Amazon Web Services' (AWS) Amazon Braket, Microsoft's Azure Quantum and Google's Cloud Marketplace, and also to select customers via its own cloud service. Its product portfolio also includes quantum key distribution (QKD) systems, quantum random number generators (QRNGs), and single-photon detectors.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
IonQ Secures $151 Billion Defense Contract
- Massive Contract Value: IonQ has been awarded the SHIELD contract from the Missile Defense Agency with a ceiling of $151 billion, encompassing a broad range of innovative capabilities that are expected to significantly enhance the company's market position in the defense sector.
- Increased Competitive Opportunities: Being among over 2,400 eligible companies allows IonQ to compete for future task orders, which will provide the company with more business opportunities and revenue streams, further solidifying its leadership in the quantum technology space.
- Rich Technology Portfolio: IonQ delivers a comprehensive portfolio of quantum technologies, including quantum computing, networking, sensing, and security, and its subsidiaries' capabilities in space-based intelligence and secure communications enhance its competitive edge in the defense and security markets.
- History of Government Collaboration: IonQ has a long history of collaboration with the U.S. government, supporting R&D initiatives for agencies like DARPA and the U.S. Air Force, and this contract will further strengthen its partnership with government entities, promoting the application of quantum technologies in defense.
See More
Institutional Investors Abandon Quantum Computing Stocks
- Declining Institutional Holdings: According to WhaleWisdom.com, the percentage of shares held by institutional investors in IonQ, Rigetti Computing, and D-Wave Quantum has decreased, with IonQ dropping from 57.35% to 54.71%, indicating a loss of confidence that could hinder future financing opportunities.
- Shareholder Dilution Impact: IonQ's $2 billion equity offering in October diluted existing shareholders, leading to a decline in institutional ownership percentage despite an increase in the number of shares held, reflecting market concerns about its long-term business model viability.
- Uncertain Market Outlook: While quantum computing is seen as a potential trillion-dollar market, with analysts predicting global economic value of $450 billion to $850 billion by 2040, there is currently little evidence of widespread adoption, which may dampen investor enthusiasm in the sector.
- Increased Bubble Risk: Historical data shows that quantum computing stocks have TTM price-to-sales ratios exceeding 30, often indicating bubble conditions, and combined with current skepticism about quantum computing, the sector may face significant bubble-bursting risks.
See More
Quantum Computing's Potential and Investment Risks
- Massive Market Potential: Analysts at Boston Consulting Group project that quantum computing technology could create between $450 billion and $850 billion in global economic value by 2040, while The Quantum Insider suggests a potential ceiling of $1 trillion by 2035, highlighting the long-term appeal and market opportunity of this technology.
- Mixed Stock Performance: Despite IonQ, Rigetti Computing, and D-Wave Quantum seeing stock price increases of 670%, 6,217%, and 3,912% respectively over the past year, institutional investors are showing declining confidence in these stocks, indicating a cautious market sentiment towards quantum computing.
- Financing Challenges Intensify: IonQ's $2 billion equity offering in October diluted existing shareholders, leading to a decline in institutional ownership for Rigetti and D-Wave, despite an increase in IonQ's share count, reflecting waning confidence among institutional investors.
- Historical Bubble Risks: With price-to-sales ratios exceeding 30 for quantum computing stocks, historical trends suggest that such levels often indicate the presence of a bubble, and skepticism remains regarding the widespread adoption of quantum computing, potentially leading to future market corrections.
See More
Stock Movers: Nvidia, Paramount, First Solar, Workday, Axon, HP Inc., Lucid, and Others
- Stock Market Movement: Stock futures were rising on Wednesday, indicating positive investor sentiment.
- Response to Political Events: Investors appeared to overlook President Donald Trump’s State of the Union address, focusing instead on market trends.
See More
Quantum Computing Market Holds Huge Potential
- Market Size Forecast: According to McKinsey, the quantum computing market could reach an annual revenue of $72 billion by 2035, attracting investor interest despite its current immaturity, particularly for companies like IonQ and D-Wave Quantum.
- Innovative Technology Paths: IonQ employs a trapped-ion approach achieving a 99.99% qubit gate fidelity, significantly surpassing industry averages, while D-Wave focuses on quantum annealing technology tailored for optimization problems, showcasing their unique positions in the quantum computing landscape.
- Investment Return Potential: Should IonQ or D-Wave capture the $72 billion market by 2035, with a 50% profit margin, profits could reach $36 billion, translating to a potential market cap of $1.8 trillion at a 50x earnings multiple, indicating substantial investment upside.
- Risks and Opportunities: While both companies present significant upside potential in quantum computing, investors must recognize the associated technological risks and competitive challenges, as failure to mature or surpassing rivals could lead to substantial stock price declines.
See More
Analysis of IonQ and D-Wave's Quantum Computing Prospects
- Quantum Market Potential: According to McKinsey's forecast, the quantum computing market could reach $72 billion annually by 2035, and while this market is still nascent, capturing a significant share could yield substantial returns for IonQ or D-Wave.
- Technological Divergence: IonQ employs a trapped-ion approach achieving a 99.99% fidelity score for 2-qubit gates, significantly surpassing industry averages, while D-Wave focuses on quantum annealing, which is tailored for optimization problems, highlighting their distinct strategic paths.
- Investment Risks and Returns: With market caps of $11.8 billion for IonQ and $6.7 billion for D-Wave, if they could capture the entire $72 billion market by 2035, potential returns could range from 152 to 269 times, although such scenarios are highly unlikely.
- Market Competition and Challenges: Despite the immense potential of quantum computing, IonQ and D-Wave face fierce competition from traditional computers and must overcome significant technological maturity challenges, necessitating careful risk assessment for investors.
See More
IonQ Secures $151 Billion Defense Contract
- Massive Contract Value: IonQ has been awarded the SHIELD contract from the Missile Defense Agency with a ceiling of $151 billion, encompassing a broad range of innovative capabilities that are expected to significantly enhance the company's market position in the defense sector.
- Increased Competitive Opportunities: Being among over 2,400 eligible companies allows IonQ to compete for future task orders, which will provide the company with more business opportunities and revenue streams, further solidifying its leadership in the quantum technology space.
- Rich Technology Portfolio: IonQ delivers a comprehensive portfolio of quantum technologies, including quantum computing, networking, sensing, and security, and its subsidiaries' capabilities in space-based intelligence and secure communications enhance its competitive edge in the defense and security markets.
- History of Government Collaboration: IonQ has a long history of collaboration with the U.S. government, supporting R&D initiatives for agencies like DARPA and the U.S. Air Force, and this contract will further strengthen its partnership with government entities, promoting the application of quantum technologies in defense.
See More
Institutional Investors Abandon Quantum Computing Stocks
- Declining Institutional Holdings: According to WhaleWisdom.com, the percentage of shares held by institutional investors in IonQ, Rigetti Computing, and D-Wave Quantum has decreased, with IonQ dropping from 57.35% to 54.71%, indicating a loss of confidence that could hinder future financing opportunities.
- Shareholder Dilution Impact: IonQ's $2 billion equity offering in October diluted existing shareholders, leading to a decline in institutional ownership percentage despite an increase in the number of shares held, reflecting market concerns about its long-term business model viability.
- Uncertain Market Outlook: While quantum computing is seen as a potential trillion-dollar market, with analysts predicting global economic value of $450 billion to $850 billion by 2040, there is currently little evidence of widespread adoption, which may dampen investor enthusiasm in the sector.
- Increased Bubble Risk: Historical data shows that quantum computing stocks have TTM price-to-sales ratios exceeding 30, often indicating bubble conditions, and combined with current skepticism about quantum computing, the sector may face significant bubble-bursting risks.
See More
Quantum Computing's Potential and Investment Risks
- Massive Market Potential: Analysts at Boston Consulting Group project that quantum computing technology could create between $450 billion and $850 billion in global economic value by 2040, while The Quantum Insider suggests a potential ceiling of $1 trillion by 2035, highlighting the long-term appeal and market opportunity of this technology.
- Mixed Stock Performance: Despite IonQ, Rigetti Computing, and D-Wave Quantum seeing stock price increases of 670%, 6,217%, and 3,912% respectively over the past year, institutional investors are showing declining confidence in these stocks, indicating a cautious market sentiment towards quantum computing.
- Financing Challenges Intensify: IonQ's $2 billion equity offering in October diluted existing shareholders, leading to a decline in institutional ownership for Rigetti and D-Wave, despite an increase in IonQ's share count, reflecting waning confidence among institutional investors.
- Historical Bubble Risks: With price-to-sales ratios exceeding 30 for quantum computing stocks, historical trends suggest that such levels often indicate the presence of a bubble, and skepticism remains regarding the widespread adoption of quantum computing, potentially leading to future market corrections.
See More
Stock Movers: Nvidia, Paramount, First Solar, Workday, Axon, HP Inc., Lucid, and Others
- Stock Market Movement: Stock futures were rising on Wednesday, indicating positive investor sentiment.
- Response to Political Events: Investors appeared to overlook President Donald Trump’s State of the Union address, focusing instead on market trends.
See More
Quantum Computing Market Holds Huge Potential
- Market Size Forecast: According to McKinsey, the quantum computing market could reach an annual revenue of $72 billion by 2035, attracting investor interest despite its current immaturity, particularly for companies like IonQ and D-Wave Quantum.
- Innovative Technology Paths: IonQ employs a trapped-ion approach achieving a 99.99% qubit gate fidelity, significantly surpassing industry averages, while D-Wave focuses on quantum annealing technology tailored for optimization problems, showcasing their unique positions in the quantum computing landscape.
- Investment Return Potential: Should IonQ or D-Wave capture the $72 billion market by 2035, with a 50% profit margin, profits could reach $36 billion, translating to a potential market cap of $1.8 trillion at a 50x earnings multiple, indicating substantial investment upside.
- Risks and Opportunities: While both companies present significant upside potential in quantum computing, investors must recognize the associated technological risks and competitive challenges, as failure to mature or surpassing rivals could lead to substantial stock price declines.
See More
Analysis of IonQ and D-Wave's Quantum Computing Prospects
- Quantum Market Potential: According to McKinsey's forecast, the quantum computing market could reach $72 billion annually by 2035, and while this market is still nascent, capturing a significant share could yield substantial returns for IonQ or D-Wave.
- Technological Divergence: IonQ employs a trapped-ion approach achieving a 99.99% fidelity score for 2-qubit gates, significantly surpassing industry averages, while D-Wave focuses on quantum annealing, which is tailored for optimization problems, highlighting their distinct strategic paths.
- Investment Risks and Returns: With market caps of $11.8 billion for IonQ and $6.7 billion for D-Wave, if they could capture the entire $72 billion market by 2035, potential returns could range from 152 to 269 times, although such scenarios are highly unlikely.
- Market Competition and Challenges: Despite the immense potential of quantum computing, IonQ and D-Wave face fierce competition from traditional computers and must overcome significant technological maturity challenges, necessitating careful risk assessment for investors.
See More
