Looking for the next big tech trend after artificial intelligence (AI)? Since data centers are going to require lots of ultra-powerful, lightning-fast computing to handle the increased AI demand, it could be quantum computing.
IonQ (IONQ 5.50%) specializes in quantum computing and is ramping up to potentially take advantage. Investors haven't seen the high-end data center trend gain steam just yet, but that's no reason to give up on IonQ. If IonQ can address a financial headwind it faces, the company's shareholders just might see some robust returns in the coming months.
Two pops and a big drop
IonQ stock's performance over the past year was volatile, with some thrills along the way. A year ago, it traded at around $10.60. Since then, the stock price doubled to $20 a couple of times before sliding to around $8 currently (a 24.5% drop). If you invested $1,000 in IonQ a year ago, it would be worth $754 today.
IonQ is a relatively young company investing heavily in its future growth in a young industry. Because of that, its stock price is bound to be volatile. Its future performance depends largely on how quickly businesses adopt quantum computing. If you're bullish on this niche industry, then IonQ stock is as pure play as it gets. From power grid modernization to airport flight gate optimization, IonQ is always finding new use cases for quantum computing.
A green flag and a red flag
Based on IonQ's Q1 top-line results, the company is growing quickly. IonQ's revenue jumped 77% year over year to $7.6 million. However, along with revenue growth came growth in IonQ's expenses in every category of expenditures (research and development, sales and marketing, etc.). Consequently, IonQ's net loss increased to $39.6 million from $27.3 million in the year-earlier quarter.
How IonQ management handles this balance sheet situation will go some way to determining whether the stock price will return to those $20 levels it saw back in the summer and fall of 2023.
