Investing in the Future: Two Companies Disrupting Technology

Ground-floor opportunities in transformative technologies don’t come along often. Currently, we find ourselves at a pivotal moment as two revolutionary sectors—quantum computing and electric aviation—transition from research labs to commercial reality. Two companies leading this charge are IonQ (NYSE: IONQ) and Joby Aviation (NYSE: JOBY).

Investing in these sectors carries significant risks; studies show about 90% of early-stage technology companies do not survive their first decade due to bankruptcy, forced mergers, or buyouts. However, successful innovators can produce life-changing returns. Let’s explore why these two companies merit attention despite their speculative nature.

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Pioneering Quantum Computing

IonQ is making significant strides in quantum computing, a rapidly evolving technology poised to reshape fields from drug discovery to financial modeling. In its third-quarter 2024 results released on Nov. 6, the company reported revenue of $12.4 million, marking an impressive 102% increase compared to the same period last year.

More insightful than the revenue is IonQ’s strategic positioning. The company secured a $54.5 million contract with the U.S. Air Force Research Lab during the third quarter and has announced partnerships with industry leaders such as AstraZeneca and Ansys. These alliances not only validate IonQ’s technology but also pave multiple pathways to commercialization.

Investor sentiment is strong—IonQ’s stock has surged 147% from January 1 to November 26, 2024. This momentum reflects more than mere retail enthusiasm. Securities and Exchange Commission (SEC) filings reveal that Citadel Advisors, led by billionaire Kenneth Griffin, has been steadily acquiring a 2.56% stake since early 2021, indicating that savvy investors recognize the long-term potential in IonQ’s technology leadership.

This institutional support aligns with wider industry forecasts. Fortune Business Insights predicts the quantum computing market will grow from $885.4 million in 2023 to $12.6 billion by 2032, as quantum systems start addressing real-world challenges that overwhelm traditional computing systems.

Transforming Urban Transportation

Joby Aviation aims to revolutionize urban mobility with its electric vertical takeoff and landing (eVTOL) aircraft. Although still in the pre-revenue phase, the company’s progress against key technical and regulatory goals demonstrates a strategic approach to establishing a new category of transportation.

Recently, Joby’s third production prototype successfully completed exhibition flights at Toyota‘s Higashi-Fuji Technical Center in Japan, as noted in their Nov. 6 earnings release. In a significant development, Toyota deepened its commitment by investing an additional $500 million during the third quarter—this not only offers capital but also critical manufacturing expertise from the world’s largest automaker.

The broader eVTOL market presents a strong opportunity. According to Exactitude Consultancy’s analysis released on Nov. 14, 2024, growth is expected to soar from $1.76 billion in 2024 to $24.1 billion by 2031. Despite Joby’s stock gaining a more modest 18.8% from January 1 to November 26, 2024, SEC filings indicate that Citadel Advisors has been accumulating shares since late 2022, signaling that sophisticated investors are aware of the company’s first-mover advantages in this emerging field.

Looking Ahead

My investment strategy for both IonQ and Joby Aviation centers around their potential to become foundational players in transformative industries. Although both companies are either pre-revenue or in the early revenue stage, they operate within burgeoning markets that present significant regulatory and technological challenges. Nevertheless, their strong intellectual property, strategic partnerships, and growing commercial viability provide alluring risk-reward profiles for patient investors.

My plan includes gradually building positions in both companies over the next five years, aiming for at least a 10-year holding period. This strategy allows ample time for their technologies to develop while managing overall risk through gradual accumulation.

For investors willing to accept market volatility in pursuit of substantial returns, IonQ and Joby Aviation present rare opportunities to invest in potentially groundbreaking technologies. While not suited for core portfolio positions, these early-stage growth stocks can offer significant upside when approached with careful position sizing and appropriate timeframes.

Seizing a Second Chance at Investment

Have you ever regretted missing out on successful stock investments? If so, you might find this interesting.

Occasionally, our expert team of analysts issues a “Double Down” stock recommendation for companies they believe are on the verge of significant growth. If you’re concerned that you’ve already missed your investment opportunity, now could be the ideal moment to act before it’s too late. The numbers speak for themselves:

• Nvidia: If you had invested $1,000 when we doubled down in 2009, you’d have $350,915!*
• Apple: If you had invested $1,000 when we doubled down in 2008, you’d have $44,492!*
• Netflix: If you had invested $1,000 when we doubled down in 2004, you’d have $473,142!*

We are currently issuing “Double Down” alerts for three remarkable companies, and you may not encounter another opportunity like this soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 25, 2024

George Budwell has positions in IonQ, Joby Aviation, and Toyota Motor. The Motley Fool recommends Ansys and AstraZeneca Plc. 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.