Shares of IonQ, Inc. (IONQ +5.43%) rallied 11.6% this week through Thursday trading, according to data from S&P Global Market Intelligence.
The quantum computing leader didn't report any news this week. However, the massive rally in quantum computing stocks we've seen over the few past months continued as several Wall Street sell-side analysts weighed in positively on the technology and IonQ specifically.
NYSE: IONQ
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Morgan Stanley and D.A. Davidson give the thumbs-up
On Monday, Morgan Stanley Joseph Moore upped his price target on IonQ from $14.90 to $37, saying, "We can't identify a clear catalyst for this kind of equity appreciation in the space over that time, but we do see continued indications that investment in quantum should continue growing at a rapid pace."
Indeed, there seems to have been a massive, sudden interest in quantum computing stocks since late summer, which has only gathered steam recently. Last week, IonQ was the first quantum computing company to display its technology at the New York Stock Exchange. Additionally, last week Alphabet (GOOG 0.15%) unveiled its new quantum computing chip named Willow, which also appears to have had a bullish effect on quantum stocks.
Later on in the week on Thursday, another Wall Street firm, D.A. Davidson, weighed in on IonQ with a bullish initiation and a $50 price target. In this note, the analysts actually appreciated IonQ's differentiated approach versus others, writing IonQ's "trapped-ion qubit architecture offers IonQ greater reliability, accuracy, and scalability [than competitors]."
IonQ looks risky after its run
Investors are apparently beginning to look forward to commercial deployment of quantum applications in the near future, rather than viewing quantum computing as a sort of fancy science experiment.
However, widespread quantum deployment could still be some years off, and there aren't really any financial fundamentals for investors to hang their hats on with any of these quantum stocks as of yet. Therefore, IonQ's run this week and the quadrupling of the stock price since October leaves shares highly vulnerable to a pullback if traders run out of patience or if sentiment changes.
After all, even the D.A. Davidson note was written under its new "DaVinci" initiative whereby the firm uses a venture capital approach to price targets, emphasizing technology over financials and noting these stocks are far more "speculative" than the other stocks the firm covers.
All in all, investors should be extremely careful trying to chase this speculative rally.
