IonQ’s Potential: Is It the Next Nvidia in Quantum Computing?

With the rise of new megatrends, small companies can swiftly rise to prominence. Currently, quantum computing is gaining notable attention under the broader umbrella of artificial intelligence (AI).

At first glance, one might expect that this burgeoning interest would bolster confidence in established AI players like Nvidia, Microsoft, Alphabet, and Amazon. However, investors often seek fresh opportunities outside of these well-known names, aiming to identify the next breakthrough innovation.

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In the realm of quantum computing, a lesser-known entity, IonQ (NYSE: IONQ), is garnering considerable attention. The company has experienced a remarkable 222% increase in its share price over the past six months. Recently, CEO Niccolo de Masi made a striking prediction, potentially signaling vast future gains.

Could investing in IonQ today mirror the opportunities present when buying Nvidia stock prior to the AI boom?

IonQ’s CEO Makes a Provocative Statement

The computing landscape has evolved significantly over the years. The introduction of the central processing unit (CPU) marked a crucial advancement in modern computing. CPUs play a key role in processing instructions efficiently through intricate architectures and circuits. In the 1990s, Intel was a major player in this domain.

As technology progressed, graphics processing units (GPUs) began to gain traction in the early 2000s, primarily enhancing visual experiences for video gaming. Their architectural design allows for specialized parallel processing, delivering rapid results tailored to particular computing tasks. While Nvidia pioneered GPU development, Advanced Micro Devices has also emerged as a significant contributor. Presently, GPUs serve as vital infrastructure in today’s computing era, crucial for training generative AI applications due to their parallel processing abilities.

Now, the tech sector is casting its gaze toward quantum computing, which represents a fundamentally different approach to data processing compared to traditional computers. This technology promises to solve specific complex problems more quickly than classical supercomputers, though it remains largely untested in practical applications today. Some proponents argue that it may define the next stage of computing, making it an enticing investment opportunity.

In a recent CNBC interview, IonQ’s CEO boldly asserted that the company stands as the “800-pound gorilla” in the quantum computing arena, suggesting its trajectory resembles that of Nvidia before the AI boom.

🚨 $IonQ ‘s new CEO on CNBC:

“We are decades ahead of MSFT, IBM, AMZN.” 👀

“We are what NVDA was a few years ago.” 🔥 @IonQ_Inc @NiccoloDeMasi pic.twitter.com/sXmzqIXYZL

— The Dude (@1_regular_dude) February 27, 2025

Evaluating the Nvidia Comparison

During de Masi’s interview, he likened IonQ’s current positioning to Nvidia’s status approximately ten years ago. To evaluate the accuracy of this comparison, let’s delve deeper.

In Nvidia’s fiscal 2015 period ending January 25, 2015, the company reported revenues of $4.7 billion and a net income of $631 million. At that time, its market capitalization was approximately $11.3 billion.

IONQ Market Cap data by YCharts.

IonQ is currently a smaller entity compared to Nvidia a decade ago. Additionally, IonQ’s cash burn rate has surged, while revenue growth accelerates. This situation may reflect heavy investments in research and development, but justifying rising losses amid relatively low revenues is challenging.

Image source: Getty Images.

Should You Invest in IonQ Stock Now?

It seems misguided to equate IonQ today with Nvidia prior to the AI revolution. Currently, IonQ’s stock trades at a price-to-sales (P/S) ratio exceeding 100, whereas Nvidia traded at only 2.4 early in 2015.

This stark difference in valuations suggests investors may not have fully recognized Nvidia’s potential back then. Few understood the extensive applications for GPUs beyond gaming during that period. Consequently, Nvidia’s valuation remained low despite its growing and profitable enterprise. In contrast, investing in IonQ today translates to a considerably higher premium.

Moreover, IonQ’s valuation has rapidly escalated in a short time frame. Even with a price correction, the stock may still appear overvalued due to the company’s modest sales figures and elevated cash burn rate. While one could argue that investing in quantum computing today resembles betting on the early rise of the AI trend, caution is worthwhile. Many challenges remain before quantum technology becomes practical, which could take decades to resolve.

Unless you possess a considerable degree of patience regarding your investment choices and are prepared for notable volatility, it may be wise to hold off on investing in IonQ stock at this time.

A Second Chance for Potential Investments

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Currently, we are issuing “Double Down” alerts for three remarkable companies, and opportunities like this may not occur again soon.

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*Stock Advisor returns as of March 3, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Intel, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.