I've got bad news and good news for IonQ (IONQ 14.67%) investors today.
Bad news first: IonQ stock plunged 12.3% through 12:40 p.m. ET Friday. And the good news?
Image source: Getty Images.
No bad news for IonQ stock
The good news is that there's no specific bad news behind the sell-off -- no earnings reports that missed targets, no analyst downgrades, not so much as a lowered price target on Wall Street. Instead, IonQ stock seems to be crashing simply because everything tech is selling off today: Bitcoin (BTC 7.29%) is off 4.2%, and Nvidia (NVDA 6.02%) is losing 5.2%. Red-hot memory company Micron (MU 11.20%) has gone ice cold -- down 10%.
Basically, what we're looking at here is a "risk-off" day for the market.
What sparked it? The most likely catalyst stems from worries over Broadcom's (AVGO 7.46%) earnings report Wednesday night. Broadcom spooked investors when it warned that sales of its artificial intelligence chips will "only" triple in Q3, and not grow even faster, as analysts had hoped.
And now everyone is panicking about everything tech, quantum computing stocks included.
NYSE: IONQ
Key Data Points
So, is it safe to buy IonQ stock?
Just because we know why IonQ stock is selling off doesn't necessarily mean it's safe to buy it, however. As a technology and as an industry, quantum computing is still in its infancy and probably years away from being a profitable endeavor.
In the case of IonQ, analysts polled by S&P Global Market Intelligence don't expect profits to arrive as far out as analysts are willing to make forecasts (in IonQ's case, that's 2030). Worse, these analysts anticipate IonQ will burn through nearly $900 million in cash over these next few years -- nearly half its cash on hand. Before buying today's dip, make sure to check your risk tolerance first.
