What happened
IonQ (IONQ 9.66%) stock is making big gains this week following news that it has signed a new deal with a ministry of South Korea's government. The quantum computing specialist's share price had climbed roughly 55% from last week's market close as of 10:15 a.m. ET Friday, according to data from S&P Global Market Intelligence.
IonQ published a press release on June 29 announcing that it had entered into a preliminary agreement to provide education services to technology workers at South Korea's Ministry of Science and ICT (Information and Communications Technology). The preliminary agreement was signed on June 27, and IonQ stock started making big gains before the agreement was widely announced.
So what
Investors are interpreting the agreement to provide education and training services to South Korea's Ministry of Science and ICT (MSIT) as a significant vote of confidence in IonQ's position in quantum technologies. Per the terms of the preliminary agreement, IonQ will use its expertise and resources to support masters, doctoral students and postdoctoral researchers, and help promote the development of the quantum computing industry in South Korea.
Now what
Following the recent pricing surge, IonQ stock is now up roughly 319% year to date. For the current fiscal year, the company is guiding for revenue of $19.2 million and bookings between $45 million and $55 million.
IONQ PS Ratio (Forward) data by YCharts
IonQ's business is still in relatively early stages of scaling up. The company has an incredibly growth-dependent valuation and is currently trading at more than 150 times this year's expected sales.
The recent agreement with South Korea's MSIT may be a bullish signal for IonQ, but investors should keep their expectations in check. The business's outlook remains highly speculative, and it remains to be seen whether the company will be capable of establishing a lasting foothold in the quantum technologies space.
