IonQ (NYSE:IONQ) is in a strong position to shape the next wave of disruptive computing technology – quantum computing – which could unlock multi-trillion dollars in economic value and generate billions in hardware and software revenue over the long run.
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That is the opinion of J.P. Morgan analyst Peter Peng, who believes that although quantum computing is still in the early stages of adoption because of today’s compute limitations, IonQ has laid out a “clear technology scaling roadmap to drive commercial viability.”
That roadmap targets 256 qubits in 2026, 10,000 qubits in 2027, and as many as 2,000,000 physical qubits by 2030. Its recent acquisition of Oxford Ionics, which brings electronic qubit-control technology, supports IonQ’s ability to keep scaling while improving fidelity and “manufacturing efficiency.” Instead of relying on lasers to manipulate qubits – a method that becomes increasingly complicated as systems scale – Oxford Ionics uses electronic signals to control trapped-ion qubits, offering benefits such as scalability, higher fidelity, and more efficient manufacturing. “As a result,” says Peng, “IonQ can rapidly and cost-effectively scale its systems, supporting mass manufacturability and industry-wide adoption of quantum computing.”
The company is also building a comprehensive, full-stack platform – akin to Nvidia’s model – that combines hardware (covering compute, networking, security, and sensing), software, and ecosystem development. Peng thinks this approach enables IonQ to tackle all three main areas of quantum technology – computing, sensing, and communications – which together could represent a $46 billion to $97 billion TAM (total addressable market) by 2035. The analyst anticipates that IonQ will sustain its “rapid revenue growth trajectory,” supported by its strong leadership, strategic partnerships (including Hyundai, AFRL, AstraZeneca, EPB, and Ansys), product commercialization, and solid capital position.
Meanwhile, IonQ is rolling out quantum computers and networks globally, backed by a growing backlog of government and commercial contracts – including agreements over $100 million with the US Air Force Research Lab. Its technology is available on all major cloud platforms (AWS, Microsoft Azure, and Google Cloud) and is used by Fortune 500 companies, national laboratories, and leading research institutions.
Overall, Peng has faith in IonQ’s unique full-stack approach and believes it is well-funded to execute on its ambitious roadmap. While all that sounds like an endorsement, ultimately, Peng advocates staying on the sidelines for now. “Despite our favorable view of IonQ’s technology and business outlook, we are initiating coverage at Neutral as we believe the risk/reward is fairly balanced at current price levels, reflecting a steep valuation,” the analyst summed up.
That Neutral rating is backed by a $47 price target that factors in a one-year gain of 8%. (To watch Peng’s track record, click here)
2 other analysts join Peng on the fence, but with an addition of 7 Buys, the analyst consensus rates the stock a Moderate Buy. The average target clocks in at $76.11, implying the shares will climb 75% higher in the months ahead. (See IonQ stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.