Everybody and his uncle wants to invest in artificial intelligence (AI) nowadays. Yet, many stock traders are unaware of the huge opportunity with an AI-adjacent technology, quantum computing. IonQ (NYSE:IONQ) IONQ stock offers pure-play exposure to quantum computing, but this stock isn’t appropriate for every investor.
IonQ is headquartered in Maryland, and the company develops ultra-powerful supercomputers. The company’s financials aren’t perfect, so be sure to conduct your full due diligence before investing in IonQ. There’s hero-or-zero potential here, so get ready for a wild ride into the world of quantum computing.
Can You Handle the Fast Moves With IONQ Stock?
Much like IonQ’s supercomputers, IONQ stock can move as fast as lightning. For example, the stock rallied 10% on Dec. 14 even though there was no company-specific news. Basically, the market was just in a risk-on mood that day.
Just remember that high-beta stocks can go down just as fast as they can go up. This is why not everyone is a good candidate to invest in IonQ. Highly conservative investors should probably just steer clear.
On the other hand, risk-tolerant investors might choose to give IONQ stock a try. After all, IonQ recently published a major, positive announcement. Specifically, the company’s best-in-class quantum computer, known as Forte, is now available through Amazon’s (NASDAQ:AMZN) Braket Direct program.
As IonQ’s press release explains, Amazon Braket is a “fully managed quantum computing service from Amazon Web Services (AWS).” As you’re probably aware, AWS is a popular cloud computing platform. Getting wide exposure through Amazon’s Braket Direct program is a huge win for IonQ and could potentially pave the way for further tie-ins with Amazon.
IonQ’s Widening Earnings Loss Is a Red Flag
To be completely fair and balanced, I have to present both the green and red flags for IonQ. The company’s third-quarter 2023 earnings report provided both positive and negative points for investors to consider.
The good news is that IonQ increased its revenue from $2.763 million in the year-earlier quarter to $6.136 million in Q3 2023. However, during that same time frame, IonQ’s cost of revenue (excluding depreciation and amortization) ballooned from $733,000 to over $2 million.
This helps to explain why IonQ’s bottom-line financials are moving in the wrong direction. Specifically, the company’s net loss deepened from $23.983 million in the year-earlier quarter to $44.811 million in the third quarter of 2023.
Quantum computing is an evolving science, and it will require capital outlays to develop this type of technology. Yet, it would still probably be a good idea for IonQ to focus on cost containment in the coming quarters. So, investors should continue to monitor IonQ’s financials.
IONQ Stock: Big Risk, Big Potential Rewards
Quantum computing could be the hidden AI-adjacent technology that investors are missing out on. Thus, a small share position in IonQ today might bring huge rewards in a few years.
There are no guarantees, though, so understand the risks and be prepared for volatility. All in all, if you have an iron stomach and are willing to conduct your due diligence, feel free to consider a small position in IONQ stock.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.