Is IonQ the Best Quantum Computing Stock to Buy Now?

Artificial intelligence (AI) investing still accounts for the majority of investors' interest in the tech realm. However, quantum computing is also starting to pick up steam. There are multiple companies in the space that investors are excited about, but one of the more popular picks is IonQ (NYSE: IONQ).

IonQ was the first quantum computing pure play to go public, so it has a slight first-mover advantage over its peers. It is also approaching quantum computing from a unique standpoint, but is this enough to make it the best quantum computing stock to buy now?

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Quantum computing is still establishing commercial viability

There are a handful of ways to approach quantum computing, but the most popular by far is superconducting quantum computing. This requires cooling a particle to near absolute zero, then using its quantum mechanics for computing. Currently, this technology is incredibly expensive and doesn't produce the best accuracy. However, IonQ's approach is completely different and solves both of those two problems with one trade-off.

IonQ uses the trapped-ion method, which can be done at room temperature. Furthermore, IonQ's accuracy is much better than its superconducting peers, and it currently holds a record in 1-qubit and 2-qubit gate fidelity, a measure of how accurate a quantum computer is after completing a calculation. There is no free lunch in this realm, and IonQ's trade-off is that its processing speeds are slower than its superconducting counterparts.

However, with the primary concern about quantum computing centering around whether it's accurate enough to be useful, speed is a secondary consideration. This is what makes IonQ a strong candidate in the quantum computing arms race, as it may reach commercial viability faster than any of its competitors.

If IonQ can win and sustain the first-mover advantage, it could have significant ramifications for its long-term outlook. We're seeing this play out in the generative AI arms race right now. Nvidia (NASDAQ: NVDA) had the most powerful computing units available at the time when massive investments were being made in the data center space. So, it naturally became the top choice for nearly every company, locking its graphics processing units (GPUs) in as the computing unit of choice for many AI hyperscalers.

But does that make IonQ a buy right now?

It will be a few years before we know if IonQ is successful

One problem with quantum computing investing is that it's still a few years out from commercial relevance. IonQ, along with many of its peers, has pointed toward 2030 as a turning point for the technology, yet that's still five years out.

Five years ago, we were amid the COVID-19 pandemic, and nobody (outside of those specifically involved in the industry) had ever heard of generative AI or large language models. A lot changes in the investing realm over five years, and being too early to the movement can result in poor returns, as there's often a ton of hype surrounding a stock in investing trends like quantum computing without actual results.

That's what we're seeing with IonQ now, as it has achieved a $20 billion valuation, yet hasn't had any significant system sales that can sustain the company. Its primary revenue source is research contracts, and until IonQ can sustainably sell its computing units, IonQ will maintain its status as a speculative stock.

This makes it incredibly risky, so investors must size the position of IonQ in a portfolio appropriately. If investors can do this, then IonQ could be a great lottery ticket stock pick. However, its success is far from certain, and the stock could go to zero if its technology isn't adopted. Nonetheless, I think IonQ displays enough technical prowess that it could be a massive winner in the quantum computing space; we just won't know for sure until a decade from now.

Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.