Surprising news slams IonQ stock price
The quantum computing shares got hit by unexpected news and earnings results.
One month ago, quantum computing took center stage after Google announced a major advance with its Willow.
The ability to solve seemingly previously unsolvable problems with quantum computing unleashed a torrent of speculation over the industry's prospects, resulting in widespread interest in quantum computing stocks, including IonQ (IONQ) .
Related: 5 quantum computing stocks investors are targeting in 2025
While the potential is game-changing, it could take time for the quantum computing revolution to happen. In the meantime, quantum computing stocks like IonQ are likely to trade mostly on hype and expectations than reality.
This point was hammered home today, when shares got hit for a loss of 17%
What's quantum computing?
Quantum computing aims to revolutionize how computers work. The approach applies quantum mechanics laws to solve highly complex problems more easily than existing computers.
The computers we're familiar with use binary signals, ones or zeros, and they process information sequentially.
Quantum computers use quantum bits, or qubits, subatomic particles, to process information simultaneously.
“Digital computers have been making it easier for us to process information for decades," the consulting firm McKinsey said in an April report. "But quantum computers are poised to take computing to a whole new level."
McKinsey believes quantum computers may transform machine learning across sectors and industries.
Why did IonQ shares tumble?
IonQ was one of a slate of quantum computing companies that rallied significantly in December and early January on the potential opportunity.
However, most of these quantum computing companies have little revenue and are losing money.
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On February 27, IonQ released its latest financial results. Unlike some quantum computing companies, IonQ is achieving meaningful revenue and growing.
In Q4, revenue surged 92% to $11.7 million. However, losses mounted. Earnings per share totaled a loss of 93 cents per share, falling 68 cents per share below analysts' estimates.
IonQ's full-year revenue grew 95% to $43.1 million. New bookings were $95.6 million in 2024, including $22.7 million in the fourth quarter.
In 2025, management's guidance is for organic and inorganic revenue of between $75 million and $95 million, including $7 million to $8 million in Q1.
The results show a fast-growing company; however, losses continue to make this a very high-risk and speculative stock.
Perhaps the unexpected announced share offering is the greatest headwind causing today's tumble. IonQ entered an equity distribution agreement with Morgan Stanley & Co. LLC and Needham & Company.
Under the agreement, IonQ may sell up to $500 million in stock at the prevailing market price, potentially diluting existing shareholders.
