IonQ (IONQ 5.67%) has attracted considerable attention in recent years. The quantum computing stock has drawn interest for its research and development, as well as its rapid growth.
However, such attention doesn't always translate into long-term gains. Thus, investors need to take a closer look at the company and industry at large to see whether IonQ is a long-term winner.
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Why investors focus on IonQ
Investors likely focus on IonQ because they see quantum computing as the next big thing and see the possibility that buying such a company while it is small could lead to considerable returns over time.
Indeed, one only needs to look at the historical returns from innovations such as the personal computer, the internet, and, more recently, the rise of artificial intelligence (AI) to know innovation can deliver massive returns. Assuming quantum technology can succeed in the marketplace, it can also hold such potential.
Moreover, it recently developed a prototype that could lead to relatively compact, room-temperature quantum systems. This is notable since current quantum systems often take up the space of an average room and require temperatures near absolute zero.
Unfortunately for IonQ, most of its revenue has come from research-related products, indicating that, at least for now, quantum computing is a solution without a problem.
In the first quarter of 2025, IonQ generated just $7.6 million in revenue. That's a small fraction of its $83 million in costs and expenses for the same period, raising questions about whether it can ever turn a profit.
Furthermore, investors may question its remaining growth potential. The stock rose by about 420% over the last year. That gives it a market cap of over $10 billion, a massive size for a company generating only $7.6 million in quarterly revenue. Not surprisingly, that growth results in a price-to-sales (P/S) ratio of 208, a high level even for a fast-growing stock.
Ultimately, the potential of quantum computing and IonQ's innovations make the stock intriguing. However, it is likely too expensive and too unproven for investors to consider at this time.
