Track market-moving stories before they get noisy

IonQ (IONQ +1.87%) closed Thursday at $35.77, up almost 12% in a single session as quantum computing stocks rallied. Even after that jump, shares of the quantum computing specialist sit about 58% below their 52-week high of $84.64. And yet the company still carries a market capitalization of $13.35 billion.

So the stock manages to look beaten down and expensive at the same time. Here's a closer look at what has to go right for today's price to work out.

Image source: Getty Images.

Growth from a very small base Highlighting why the stock attracts so much attention, IonQ's first-quarter revenue rose 755% year over year to $64.7 million, coming in 30% above the midpoint of management's own guidance. Growth like that is nearly impossible to find elsewhere in the market, and I understand why investors are drawn to it.

The composition of the revenue is encouraging, too. About 60% of it came from commercial customers rather than governments, about 35% came from international customers, and more than a third came from customers buying across product lines -- quantum computers, networking, and sensing.

The order book is filling up even faster. Remaining performance obligations, or the future revenue IonQ already has under contract, reached $470 million in the quarter, up 554% year over year.

Management raised its full-year outlook, too. It now expects revenue of $260 million to $270 million in 2026, which it says represents organic growth of more than 100% year over year.

Meanwhile, the technology keeps advancing. During the quarter, IonQ sold its first 256-qubit, sixth-generation system to the University of Cambridge, completed the first commercial demonstration of two connected quantum computers, and published its blueprint for fault-tolerant quantum computing. The company also picked up a $39 million Space Development Agency contract during the period.

"We are now moving from component-level testing to integrated, system-level testing of the full 256-qubit quantum computer," said Chairman and CEO Niccolo de Masi in the company's first-quarter earnings release.

What the price already assumes Profits are another matter. IonQ technically reported first-quarter net income of $805.4 million under generally accepted accounting principles (GAAP), but that figure was swollen by non-cash fair-value adjustments on items like warrant liabilities and investments, not by the business itself. On an adjusted basis, the company lost $0.34 per share, and its adjusted EBITDA was a $96.8 million loss. For the full year, management expects an adjusted EBITDA loss of $310 million to $330 million. The balance sheet buys plenty of time, though. IonQ ended March with $3.1 billion in cash, equivalents, and investments, enough to fund losses at this year's expected pace for several years.

Valuation is the harder problem: At $13.35 billion, the market values IonQ at roughly 50 times the midpoint of its own 2026 revenue guidance. A price like that only works if triple-digit growth continues well beyond this year.

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After all, even a far lower multiple demands enormous expansion. To trade at 10 times sales at today's market value, IonQ would need about $1.3 billion of annual revenue -- about five times the midpoint of this year's guide. Reaching that by the end of 2029 would require compounding at close to 70% a year for three more years.

However, the guidance implies the growth is already decelerating beneath the annual figure. IonQ expects revenue of $65 million to $68 million in the second quarter of 2026, roughly flat with the first quarter. And hitting the full-year range implies quarterly revenue stays near that level for the rest of 2026. In other words, this year's extraordinary growth rate is mostly a comparison against a much smaller past, not a business that is still compounding quarter by quarter.

So, is IonQ worth $13 billion today? I don't have anywhere near the conviction to pay it. The growth is impressive, and the $3.1 billion war chest gives the company years of staying power. But quantum computing remains an early market whose commercial payoff may still be years away. And a 50-times-revenue price arguably assumes IonQ converts its head start into a long stretch of compounding sales.

If the company keeps topping its own guidance while losses hold near the planned pace (the second-quarter report due Wednesday, Aug. 5, is the first chance to show it), I could warm up to the stock. For now, I'll watch from the sidelines.

Quantum computing has been a white-hot industry for investors, but who's actually winning the quantum computing race?

The answer depends on what you mean by "winning." If you're asking which company has made the most progress commercially, I think the answer is fairly straightforward: IonQ. But it's still early innings.

If you're asking who will build the first truly useful quantum computer, that's a much more interesting question, and the truth is, it's much too early to tell that just yet.

Let's take a look at both IonQ and Rigetti Computing.

Image source: Getty Images

IonQ is building a full-stack quantum platform IonQ (IONQ -3.61%) spent the last year transforming itself from a quantum computing developer into something more expansive. Company management now describes IonQ as a full-stack platform spanning computing, networking, sensing, and security.

Its underlying technology differs from many competitors, including Rigetti. IonQ builds trapped-ion quantum computers, a design generally associated with very high gate fidelity -- the accuracy of quantum operations -- but slower gate speeds than superconducting systems. The company reported a 2-qubit gate fidelity of 99.99% last year.

IonQ is also pushing aggressively into commercial deployment after a string of major acquisitions last year. During the first quarter of 2026, it sold the first of its newest 256-qubit system and expanded sales into more than 30 countries.

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Rigetti is betting on superconducting speed Rigetti Computing (RGTI -4.54%) builds superconducting quantum processors, the same general technology pursued by companies like IBM and Alphabet. These systems operate dramatically faster than trapped-ion machines, with gate speeds measured in tens of nanoseconds. But they also require extremely complex cryogenic cooling systems operating near absolute zero and generally struggle to deliver the same level of fidelity as IonQ's trapped-ion approach.

Rigetti finally launched its 108-qubit Cepheus-1-108Q processor and demonstrated a 2-qubit gate fidelity of 99.1%. CEO Subodh Kulkarni has said the company believes it can reach quantum advantage -- industry jargon for the point at which quantum computers outperform classical computers on commercially useful tasks -- in roughly three years if it reaches about 1,000 qubits while maintaining high fidelity and effective error mitigation.

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How do IonQ and Rigetti compare financially? IonQ generated $64.7 million in first-quarter revenue, a whopping 755% increase from a year earlier, while raising full-year guidance to between $260 million and $270 million. Its remaining performance obligations (RPO) -- contracted revenue that hasn't yet been recognized -- rose to a record $470 million. Perhaps most importantly, the company finished the quarter with roughly $3.1 billion in cash, cash equivalents, and investments.

To be sure, IonQ remains deeply unprofitable. Its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) loss guidance still calls for losses of more than $300 million this year. Management expects significant losses for the foreseeable future.

The company reported GAAP (generally accepted accounting principles) profit last quarter came almost entirely from a noncash accounting adjustment rather than operating earnings.

Rigetti operates on a different scale at the moment. The company generated just $4.4 million in first-quarter revenue while ending the quarter with $569 million in cash and no debt. Like IonQ, its reported GAAP profit resulted primarily from warrant accounting rather than its core business. Rigetti also continues to rely heavily on government development contracts while working toward larger hardware sales over time.

The quantum computing opportunity is massive -- but uncertain McKinsey estimates quantum computing could eventually create between $1.3 trillion and $2.7 trillion in economic value by 2035. That's a huge opportunity, yes, but investors need to take it with a grain of salt and keep a few things in mind beyond the fact that McKinsey's is one of the more generous estimates.

First, that is the total value produced across the global economy. It's not a sales target for quantum firms. According to the same report, the slice of the pie for the producers themselves -- such as Rigetti and IonQ -- is just $60 billion to $100 billion.

Second, no one can say with any certainty when -- or even if -- true quantum advantage will be achieved at scale. It is entirely possible that a mature, revolutionary version of this technology is decades away. There are plenty of scientific voices outside the industry that are skeptical of the timelines put forth by quantum insiders.

The bottom line At this point, I'd have to give the edge to IonQ, both in its technical abilities and its commercial success. That being said, I think excitement has outrun reality, and both companies are currently overvalued.

Key Takeaways IonQ launched Clavis XG Multiplex to make quantum security deployable across metro fiber networks. IONQ's Clavis XG Multiplex uses existing network infrastructure to reduce long-term cryptographic risk. IonQ launched InSAR capabilities for millimeter-precision ground deformation monitoring. IonQ (IONQ - Free Report) is strengthening its commercial portfolio beyond quantum computing by expanding into quantum cybersecurity and space-based geospatial intelligence. In line with this, the company introduced Clavis XG Multiplex, marking a new addition to its Clavis XG Quantum Key Distribution (“QKD”) portfolio designed to make quantum security deployable across metropolitan fiber networks. 

Clavis XG Multiplex enables high-performance, physics-based key distribution on a customer’s existing network infrastructure without requiring operators to redesign, isolate or dedicate optical networks for quantum security. The result provides a cost-effective way to reduce long-term cryptographic risk across network segments as broader post-quantum cryptography (PQC) migration progresses across the enterprise.

IonQ also commercially launched Interferometric Synthetic Aperture Radar (InSAR) capabilities through its space missions line. The offering enables millimeter-precision ground deformation monitoring with fully automated tasking and data delivery. It enables customers to detect and track physical changes on the Earth's surface with a frequency and scale never previously offered by a commercial SAR provider.

Peer UpdateRigetti (RGTI - Free Report) recently announced the general availability of its 108-qubit quantum system, Cepheus-1-108Q, marking a significant step forward in its scaling roadmap. The system represents the company’s largest modular architecture to date, built using its proprietary chiplet-based design. Rigetti is demonstrating progress in scaling quantum hardware while maintaining performance benchmarks such as 99.1% median two-qubit gate fidelity and 99.9% single-qubit fidelity. 

Quantum Computing Inc. (QUBT - Free Report) is steadily expanding its footprint in applied quantum technologies. The company secured a contract from the National Institute of Standards and Technology to develop thin-film lithium niobate photonic integrated circuits, highlighting its growing capabilities in advanced photonics. Additionally, QUBT won a subcontract linked to NASA Langley Research Center to develop quantum-based techniques for removing solar noise from space-based LiDAR data, reinforcing its role in next-generation aerospace innovation.

IONQ’s Price PerformanceOver the past year, IONQ’s shares have gained 8.6% compared with the industry’s 221.9% growth. 

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Expensive ValuationIonQ currently trades at a forward 12-month price-to-sales (P/S) of 54.58X compared with the industry median of 4.45X.

Image Source: Zacks Investment Research

IONQ Stock Estimate TrendIn the past 30 days, its loss per share estimate for 2026 has moved south to $1.07.

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IonQ currently has a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.