Shares of quantum-computing company IonQ (IONQ +3.89%) jumped 26.9% in November, according to data provided by S&P Global Market Intelligence. On Nov. 8, the company shared financial results for the third quarter of 2023, which provided the bulk of its gains for the month.
IonQ is one of the fastest-growing companies in the world and was recognized as such in November. On Nov. 8, the company said it snagged the 32nd spot on the 2023 Deloitte Technology Fast 500 list. Many investors are excited about growth stocks of this caliber.
In Q3, IonQ's revenue was up 122% year over year, showing why it was named as one the best companies for growth. Granted, this is triple-digit growth from a small starting point -- Q3 revenue was just $6.1 million. But the company is showing promising signs of successfully commercializing its quantum-computing technology.
NYSE: IONQ
Key Data Points
Revenue alone doesn't paint a complete picture for IonQ since this is a developing technology. In Q3, the company had remaining performance obligations of $73.1 million, which was a huge jump from its remaining performance obligations of $49.1 million in the second quarter.
Many players are demonstrating a willingness to try IonQ's emerging tech as evidenced by its fast growth in remaining performance obligations. This even includes interest from the U.S. Air Force, which signed a $25.5 million deal in September.
Is IonQ winning this space?
There are multiple companies working on quantum computing, each with its own approach to the space. For its part, IonQ decided to pursue trapped-ion technology. And management believes this design decision has allowed it to develop its tech faster than its peers and with better results.
IonQ's current system runs up to 29 algorithmic qubits (#AQ 29). Within the next few years, however, the company hopes to reach #AQ 64. To the uninitiated, this looks like an increase of 121%, or the difference between 29 and 64. But that's not how quantum computing works.
According to IonQ, #AQ 64 will be 34 billion times more powerful than #AQ 29, which really puts things into perspective. And it sheds light on why companies might be willing to explore what IonQ has to offer.
Try to keep both feet on the ground
Even though IonQ is fast-growing and its remaining performance obligations are increasing at an encouraging rate, this is still experimental technology. Even with #AQ 64, management is hoping that it does computing jobs better than traditional computers in some things -- known as a quantum advantage.
In other words, the technology still isn't there. And while it's trying to get there, IonQ is incurring significant losses -- it had a net loss of $44.8 million in Q3 alone.
IonQ is well capitalized and is on a promising path. But shareholders need stay patient and not get overly excited about the stock's market-beating gain in November.
