For Immediate Release
Chicago, IL – March 31, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: NVIDIA Corp. NVDA and IonQ, Inc. IONQ.
Here are highlights from Friday’s Analyst Blog:
Is IONQ Stock the Next NVIDIA and/or Worth Buying Now?
With the arrival of artificial intelligence (AI), NVIDIA Corp. became a Wall Street darling as it witnessed huge growth after going public in 1999. Now, with quantum computing being a rising tech trend, will IonQ, Inc. mirror NVIDIA's success in the future and is it a promising investment? Let's find out –
Reasons to Be Bullish on IONQ Stock
According to McKinsey, the quantum computing market is projected to reach $2 trillion by 2035. Growth in quantum computing bodes well for IonQ as its quantum computing system helps Magnificent 7 stocks, such as Microsoft Corporation (MSFT) and Amazon.com, Inc. (AMZN), by granting AI researchers access to quantum computing models.
IonQ stands out in quantum computing as its linear ion chains are capable of reaching over 100 qubits, resulting in fewer errors compared to other quantum computers. Such prowess helped IonQ notch revenues of $43.1 million last year, representing growth of 95% from a year ago. Revenues surpassed the upper end of the company's earlier announced guidance range.
At NVIDIA's latest "Quantum Day" event, CEO Jensen Huang approved that significant growth potential lies ahead for quantum computing, indicating a positive outlook for IonQ. He retracted his previous statement at the CES conference, where he said that quantum computing would take at least 15 years before it becomes practical.
In reality, IonQ recently showed that quantum computing is 12% faster than classical computing, an indication that quantum computing will be commercially viable soon. The breakthrough resulted from collaborating with Ansys, an engineering simulation company.
IonQ also has a solid cash balance, a prerequisite for quantum computing companies for continued research and development, and strategic mergers and acquisitions. IonQ raised around $360 million in net proceeds from a fruitful equity offering, increasing its pro forma cash balance to over $700 million.
Should I Invest in IONQ Stock Now? Could it Be the Next NVIDIA?
IonQ is a top choice among pure-play quantum stocks due to its stability and impressive advances in the quantum computing market, making it an attractive investment option (read more: Why Buy QBTS & IONQ Stocks After NVIDIA Quantum Day?).
Brokers also have faith in IonQ's growth potential. They have raised IONQ's average short-term price target by 70% to $42.17 from the previous $24.80. The highest target is set at $54, an upside of 117.7%.
However, it's premature to conclude that IONQ is the next NVIDIA since the latter's solid financials, insane demand for chips and GPU dominance are expected to propel its stock price higher (read more: Which AI Stock, NVIDIA or Palantir, Has More Upside and Is a Buy?).
On the other hand, IonQ's high price-to-sales ratio of 119.7 indicates that the stock is overvalued. The company also remains unprofitable. For 2024, IonQ posted a net loss of $331.6 million, which may impede its long-term growth.
For the time being, IonQ has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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NVIDIA Corporation (NVDA): Free Stock Analysis Report IonQ, Inc. (IONQ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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