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Why IonQ Stock Skyrocketed 39.7% Last Month

What happened

Shares of IonQ (NYSE: IONQ) gained 39.7% in February, according to data from S&P Global Market Intelligence. The stock soared following news that the quantum-computing company had made a new breakthrough stemming from its partnership with Duke University.

IonQ published a press release on Feb. 10 announcing that it had invented a new quantum computing operation in conjunction with the Duke Quantum Center. The share price bounced back after suffering a 31.5% sell-off in January.

Image source: Getty Images.

So what

IonQ and Duke's new quantum gate provides a way to operate on multiple connected qubits at once. The partners see the new quantum-computing operation potentially accelerating several key computing techniques and advancing the scaling of quantum algorithms.

IonQ went public through a merger with a special purpose acquisition company (SPAC) last October and has seen volatile trading in subsequent months. After a recent pullback, the stock is now up roughly 13% since the completion of the merger.

Now what

IonQ stock has given up some ground early in March's trading. The company's share price has slipped roughly 17% due to bearish pressures affecting the broader market.

IONQ data by YCharts.

The company is scheduled to report its fourth-quarter results after the market closes on March 28. With its last update, management issued guidance for sales in the fourth quarter to come in between $1 million and $1.2 million and for full-year sales to be between $1.5 million and $1.7 million. IonQ expects fourth-quarter bookings to be between $600,000 and $800,000 and full-year bookings to be between $15.7 million and $15.9 million.

IonQ currently has a market capitalization of roughly $2.3 billion and is valued at approximately 377 times this year's expected sales. Quantum computing is a market that could see massive growth over the long term, but investors have generally been shying away from speculative plays, and the company's hugely growth-dependent valuation sets the stage for the stock to see volatile trading in the near term.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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