Will This Quantum Computing Stock Be a Must-Own in 2025?

Quantum computing has received some recent investing interest over the past month thanks to Google’s breakthrough in its Willow quantum computing chip. This chip beat a benchmark test that would have taken the fastest supercomputer 10 septillion years (26 trailing zeros!) to complete.

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is a much larger business with investments in quantum computing, not a pure-play investment. However, there are a few pure plays around, and IonQ (NYSE: IONQ) is one of them. With quantum computing picking up steam, is IonQ a must-buy?

First, let’s talk about quantum computing (without getting too deep into the weeds). Traditional computing processes information in bits, which only transmits information in a binary manner (1s and 0s). Quantum computing is different. It transmits information in a number between 1 and 0, which gives it infinitely more ways to transmit information than standard computing. However, there’s a catch. Because quantum computing doesn’t transmit a 1 or a 0, some estimating errors can be involved. This problem has plagued many quantum computers, but Google’s Willow chip seemed to have solved this problem based on how it arranges qubits within the chip.

While Google’s breakthrough doesn’t benefit IonQ, it shows that quantum computing can accurately compute a problem. This has created a lot more interest in the quantum computing space and highlighted some things that IonQ is already doing well.

IonQ is also focusing on the error problem, but last November said it expected to achieve 99.9% native qubit gate fidelity in 2024 and increase that each year after. This shows that IonQ is already near the level Willow has reached, just with less fanfare involved because it’s a much smaller company.

Image of an IonQ Chip.
Image source: IonQ.

IonQ also has many massive contracts with clients. The largest is its contract with the U.S. Air Force Research Lab, which was a $54.5 million deal that is the largest known quantum computing contract award of 2024. It also has deals on the books with drug researchers and engineering simulation companies. These deals are vital, as IonQ isn’t profitable, so it needs outside funding to continue its research and development of quantum computers.

To be honest, much of quantum computing is still speculative, as investors don’t know which company will emerge as the winner in the space or how quantum computing will affect the world. But if IonQ is the big winner, there’s a lot of money to be made.