Should you buy IONQ stocks to ride the quantum computing revolution? The answer may surprise you

Science fiction is slowly becoming a scientific fact. At least, that's what we have autonomous cars, humanoid robots and now quantum computers. Researchers predict that by 2040, quantum computing will create $850 billion in economic value, and investors will rush to buy stocks of quantum computing stocks, such as they are outdated. ionq (NYSE: IONQ) In writing, the growth of more than 300% in the past 12 months has brought huge benefits to shareholders.

Is it time to hop on the IONQ train and ride the quantum computing revolution? The answer is more complicated than you think.

We can easily understand why society values ​​autonomous cars or humanoid robots. They took the work done previously by humans and offloaded it onto the machine, giving people more leisure time. But why do we need quantum computers?

A simple answer: They promise unprecedented speed in advanced computing. Traditional semiconductor-based supercomputers can take hours or even days to complete advanced mathematics, artificial intelligence (AI), or simulated computing. Quantum computers use quantum mechanics to perform these calculations in just a few seconds, saving time and money in the process. This can provide great value to society and revolutionize the entire computer industry, from personal devices to the cloud.

Sounds great, but figuring out the tangle of this technology has proven to be very difficult. Here, researchers like IONQ intervene. The company is slowly building quantum computers for commercialization and selling supplies to other research teams to help them conduct their own quantum research. It even started selling its quantum computing services on public cloud providers, though there are still many bugs to fix the technology.

If IONQ can win the competition for quantum computing first and commercialize it, there will be a lot of hope for this business. That's why investors are taking stocks to new heights, with a current market capitalization of $8.6 billion.

Image source: Getty Images.

Since this is an early stage startup trying to build new technologies in the public market, IONQ doesn't have the most beautiful finances. Last quarter, it generated only $7.6 million in revenue and lost $75.7 million. The company's operating losses have been in years and may continue to worsen as more research pours into quantum computing.

On the bright side, IONQ does have $700 million in cash on the balance sheet through various capital raises. The money is not free for shareholders and does lead to a significant dilution, with stocks up 29% over the past few years. With current burn rate, IONQ has only a few years left to gain profitability, and it looks like quantum computers will be commercialized for at least five years, if not longer. There is a lot of uncertainty in investing in state-of-the-art technology when we don’t even know if it works. This brings great risks to IONQ.

IONQ Shares Excellent Charts
IONQ shares unissued data for YCHARTS.

Quantum computing stocks will be exciting. But these are not the types of stocks that make money for investors’ portfolios. Hype technology comes to the public market. Over the past two decades, we have clean energy, 3D printing, cannabis (not technology, but inspired by legalization), electric vehicles and now quantum computing stocks, to name just a few. Some of these innovative things have produced real-world results for companies and consumers. Most stocks do a very bad job for investors.

Establishing new technologies in public places is difficult and poses high risk. IONQ and other quantum computing stocks are losing a lot of money, with very little sales and a large market capitalization. In the long run, this is the secret to poor stock performance. Despite doing well over the past 12 months, I think IONQ stock is an investor who should stay away from investors now. New technologies may be interesting, but they rarely earn good stocks.

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Brett Schafer has no position in any of the stocks mentioned. Motley fool has no position in any stock mentioned. Motley Fool has a disclosure policy.

Should you buy IONQ stocks to ride the quantum computing revolution? The answer might get you originally published by Motley Fool