U.S. investment bank D.A. Davidson is recommending that investors buy shares of quantum computing hardware and software company IonQ (IONQ) following Microsoft’s (MSFT) technological breakthrough in the space.
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Analyst Alexander Platt reiterated a Buy rating on IONQ stock with a $50 price target, which is 52% higher than where the shares currently trade. The bullish call comes after IonQ’s stock has more than tripled over the past year, rising 215% in the last 12 months.
Platt sees big things ahead for quantum computing after Microsoft unveiled its first quantum computing chip called “Majorana 1.” The analyst says that Microsoft’s new chip should be viewed as a catalyst for the entire quantum computing industry, with IonQ poised to capitalize given its focus on both hardware and software for the sector.
Accelerated Timelines
In a note to clients, Platt wrote, “This breakthrough from Microsoft signals to the industry that quantum computers capable of solving real industrial problems are now a matter of years away, not decades.” He adds that “this moment” validates IonQ’s modular approach to quantum hardware, which justifies the Buy rating and $50 price target.
Despite excitement being generated from Microsoft’s new quantum computing chip, IONQ stock is trading flat today (Feb. 20). So far this year, IonQ’s share price has declined 20% following a red-hot rally that saw the stock skyrocket, particularly throughout last autumn.
Is IONQ Stock a Buy?
The stock of IonQ has a consensus Moderate Buy rating among six Wall Street analysts. That rating is based on four Buy and two Hold recommendations issued in the last three months. The average IONQ price target of $44.20 implies 31.55% upside from current levels.
