IBM and IONQ Stock Outlook for Quantum Computing

The quantum computing industry has been rapidly evolving recently. Notably, big tech companies in the United States are taking the lead with active investments, and the synergistic effect with AI technology has brought considerable attention to this sector. In this post, we will examine the recent trends, price outlook, and investment potential for leading quantum computing stocks, especially IBM and IONQ.

Growth and Investment Trends in the Quantum Computing Industry

Quantum computing has been gaining significant interest in recent years, bringing revolutionary changes across multiple industries. Quantum technology has immense potential in finance, pharmaceuticals, semiconductors, cryptography, and defense, among others. In particular, it promises improvements in AI model training speeds, cryptographic security, and the development of new learning algorithms, positioning itself as a powerful tool in collaboration with AI.

The market has seen a dominant role from AI themes in recent years, but with prices soaring too high, investors are looking for new opportunities. Quantum computing stocks, which provide a synergistic effect with AI, are gaining significant traction at this point. Analysts predict a strong future for this market, given its impact on secure communications, drug discovery, and logistics optimization.

Learn more about how quantum computing is revolutionizing industries on IBM's official blog.

Quantum Computing Leader: IBM Stock Outlook

IBM (International Business Machines), founded in 1911, is a traditional IT company offering a variety of IT services, including hardware, software, cloud computing, artificial intelligence, and blockchain. Particularly famous for its AI system 'Watson' and mainframe computers, IBM has more patents related to quantum computing than any other company, and it has been investing in quantum computing development for years. In 2023, it developed the largest quantum computer, which received widespread attention.

Recently, IBM's stock reached a 52-week high of $199.19, reflecting strength backed by improvements in company performance and growth in AI and cloud services. Key forecasts are as follows:

• 2024 Stock Prediction: $214.18 (up 7.5% from current levels)
• 2025 Stock Prediction: $222.13 (up 11.5% from current levels)

 

IBM 차트 by TradingView

 

1. Growth in AI and Cloud Services

IBM supports corporate AI transformation through its proprietary AI platform, 'WatsonX'. During the fourth quarter of 2024, generative AI business orders doubled, reflecting a positive growth trajectory, with revenue in this segment expected to increase by 4-6%. IBM has also expanded its quantum cloud service to enable researchers and developers to work seamlessly with quantum processors.

2. Positive Earnings Report

In its fourth-quarter earnings report for 2023, IBM recorded net income of $3.3 billion and earnings per share (EPS) of $3.55, showing year-over-year growth. Revenue stood at $17.4 billion, up 4.2% from the previous year, exceeding market expectations. Following this earnings announcement, Bank of America and JP Morgan adjusted their price targets for IBM upwards. Analysts remain mostly neutral on IBM, with an average price target of $207.12.

View detailed IBM earnings analysis on Seeking Alpha.

IBM's Competitive Edge

Compared to competitors such as Google and Rigetti Computing, IBM holds a significant lead in quantum computing development in terms of patents and technological advantages. IBM's quantum computers use superconducting technology, which provides higher stability and performance. While Google is also regarded as a leader in quantum computing, IBM's customer base and commercialized solutions offer it a strong advantage as a top player in this field.

Google, on the other hand, has demonstrated quantum supremacy—a milestone indicating that quantum computers can perform a task impossible for classical computers in a reasonable time. Despite this achievement, IBM has focused on practical applications, bringing quantum technologies closer to solving real-world business problems.

Read more about Google's quantum supremacy claim.

IONQ: A Popular Quantum Stock Among Domestic Investors

IONQ has also gained attention among domestic investors as a notable quantum computing stock. Focusing on the development of quantum computing platforms, IONQ's stock has seen significant upward momentum recently. It has showcased innovative technology, particularly through the combination of quantum computing and AI, and has received positive evaluations in the U.S. stock market.

Key forecasts are as follows:

• 2024 Stock Prediction: $15.74 (down 45.46% from current levels)
• 2025 Stock Prediction: $29.64 (up 2.72% from current levels)

 

IONQ 차트 by TradingView

IONQ's Growth Drivers

• 102% Revenue Increase in Q3 (Year-over-Year): This reflects strong demand and technological growth within IONQ.
• $54.5 Million Contract with the U.S. Air Force Research Lab: This contract demonstrates IONQ's technological recognition even in the public sector. Such government contracts provide a stable revenue stream and validate their technological potential.
• Quantum Networking Technology Development and Expansion: IONQ aims to lead the future technology market through advancements in quantum networking, focusing on building a scalable quantum network infrastructure.
• Government and Industry Partnerships: IONQ continues to expand its market presence through partnerships with multiple government agencies and corporations. These partnerships are key growth drivers, enhancing both credibility and market positioning.

Analysts have given IONQ a "Strong Buy" rating, with an average price target of $19.23. However, its short-term volatility is expected to be higher.

 

Check out the latest IONQ stock updates on MarketWatch.

Considerations When Investing in Quantum Computing Stocks

Investing in quantum computing stocks comes with specific risks. Most companies in this sector have small earnings and unstable financial structures due to being in early stages of commercialization. This is particularly true for domestic companies, many of which have yet to reach profitable stages. In contrast, leading U.S. companies have started generating revenue and are spearheading the market with tangible technological advances. Hence, investors interested in quantum computing might find IBM, as a leading player, to be a more stable choice.

For risk management, consider the following:

• Diversify Investment: Quantum computing stocks are highly volatile, so they should only comprise a portion of a broader portfolio. Diversification will help manage risks associated with technological and commercial challenges.
• Monitor Development Phases: Continuously track the progress of quantum computing technologies to invest in companies closer to commercialization. Pay attention to regulatory news and funding rounds, as they provide insight into a company’s growth and stability.
• Analyze Competitors: Keep an eye on competitors like IBM, IONQ, Google, and Rigetti to stay informed of industry developments. Competitive analysis helps gauge each company's standing and potential for innovation.

Conclusion: Why Invest in Quantum Computing Stocks?

Quantum computing is a key future technology with potential applications across various industries. Its synergy with AI will bring transformative changes, and related stocks are expected to see considerable growth as a result. IBM and IONQ are companies leading this trend, with promising growth prospects. Nevertheless, it is crucial to carefully examine each company's financial status, technological achievements, and market trends before making any investment.

Consider the potential of the quantum computing industry while developing your investment strategy. Feel free to leave a comment with additional questions or check out our next article!

FAQs

1. Is investing in quantum computing stocks safe?
   Quantum computing stocks are still in the early stages of technology development, meaning they often have unstable financial structures. Many domestic companies struggle with profitability, so it's wise to approach these investments cautiously and consider U.S. companies with stable revenue structures as a priority.
2. Why is IBM considered a leader in quantum computing?
   IBM holds the most patents related to quantum computing and has been investing heavily in its development. In 2023, IBM succeeded in building the largest quantum computer, and this achievement solidified its reputation. Additionally, IBM can quickly commercialize its technology due to its extensive corporate client base.
3. What are IONQ's strengths?
   IONQ has developed a quantum computing platform and demonstrated innovation by combining quantum computing with AI. This makes it a promising player for applications in AI and data analytics. Moreover, its contract with the U.S. Air Force shows public sector recognition of its technological capabilities.
4. How will quantum computing impact AI?
   Quantum computing can exponentially increase the speed of AI model training. Improvements in LLMs (large language models) and the development of new training algorithms are expected with quantum computing, greatly expanding AI applications. For example, tasks that used to take years in data processing could be reduced to mere hours with quantum computing.
5. How long until quantum computing becomes commercially viable?
   Currently, quantum computing is in its early commercialization stages, and more time is needed for full development. However, big tech firms like IBM and Google are progressing quickly, and partial commercialization could be achieved within the next 10 years. Certain industries, such as finance and pharmaceuticals, might see earlier adoption.
6. What should I consider when investing in quantum computing stocks?
   Consider financial status, technology development stage, and patent ownership. It is crucial to invest in companies with stable financial structures and actual revenues. IBM and IONQ meet these criteria and are highly rated for their technology. Additionally, partnerships with government and private sectors are vital; collaborations with government agencies can significantly boost a company's credibility in this field.
7. What other noteworthy quantum computing companies are there?
   Google, Rigetti Computing, and D-Wave Systems are among the notable companies in this field. Each has a unique strategy and technology for quantum development. For example, Google has demonstrated quantum supremacy, establishing its position in the industry. Keeping track of these companies' technological advancements and market positioning is essential.

Find out more about quantum computing and its future potential on TechCrunch.