IonQ (IONQ -1.27%) is one of the top quantum computing stocks, and many investors are bullish on its long-term outlook. Its stock has already been quite the success story, rising over 200% since the start of 2024. However, that return is nothing compared to where it could go if IonQ develops a winning quantum computing product.
The biggest reason I think IonQ can soar over the next few years is its quantum computing approach, which is less cost-intensive than that of some of its competitors. Because it could be cheaper to deploy and scale, it could give IonQ a massive advantage over its competitors, allowing it to capture a market that IonQ estimates could be worth $87 billion by 2035.
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IonQ is going up against some stiff competition
The quantum computing space is highly competitive. There are several small, pure-play quantum computing firms that are looking to establish themselves, as well as established tech players seeking to develop the technology. Some of the most notable names in the big tech world are Microsoft, Alphabet, and IBM, although there are many more. These companies have resources that the quantum computing startups can only dream of, which immediately puts companies like IonQ at a disadvantage.
However, David versus Goliath stories exist for a reason, and IonQ has a few tricks up its sleeve that could propel it to quantum computing supremacy.
IonQ's approach differs from that of many of its competitors. Instead of using a superconducting approach that involves cooling a particle down to near absolute zero, an energy-intensive and expensive process, it employs the trapped ion approach, which can be performed at room temperature. This significantly reduces a substantial portion of its operating costs, making quantum computing viable for commercial applications. Furthermore, the trapped ion approach allows each qubit to be connected to every other qubit in the system, enabling it to achieve best-in-class fidelity. IonQ even holds world records in quantum computing fidelity.
The primary downside of the trapped ion approach is that its gate speed is slower than that of superconducting quantum computers. So, while one approach may be faster, the other is more accurate and cheaper. I believe this could be a significant advantage for the company and potentially lead to IonQ's stock soaring substantially over the next few years.
But what kind of returns can investors expect?
Quantum computing applications are endless
While competitors in the quantum computing realm are adamant that 2030 will be the turning point for quantum computing deployment, the reality is that it may not come to fruition. Traditional computing can already handle arduous workloads, so the commercial viability verdict for quantum computing remains to be seen.
However, quantum computing excels in computations where there are multiple outcomes, such as shipping logistics, artificial intelligence, and drug discovery, areas where traditional computing methods have had only marginal success. Another area where quantum computing could be a huge factor is ad optimization, as there are often several ads that could have high conversion if placed in front of the right person.
The possibilities for quantum computing applications are endless, but it remains to be seen if and when quantum computing will be a viable option. With IonQ leading the way in computing accuracy and low-cost solutions, I think it is one of the top investment options in the space.
However, there's also a chance that IonQ's approach may not be a winning one, and another quantum computing company may steal the market share. As a result, investors should manage risk by keeping their position sizing relatively small, so it doesn't significantly impact the portfolio if the investment goes to zero. But if it turns out to be a huge winner, that initial small position can grow to become a huge part of an investment portfolio.
