TLDR
- B. Riley analyst Craig Ellis initiated coverage on IonQ with a Buy rating and $61 price target, suggesting nearly 50% upside
- IonQ has scaled up its intellectual property portfolio to include more than 1,000 licensed, owned, or controlled patents and applications
- The company maintains a $1.6 billion pro forma cash balance, representing around 12% of its market capitalization
- IonQ generates revenue from consulting services and quantum computing as a service, with consulting accounting for just under 40% of revenue
- Analyst believes IonQ could capture 15% to 40% of the quantum computing market by 2035
IonQ shares climbed 1.6% to $40.79 following a bullish analyst initiation that highlights the company’s growing position in quantum computing. B. Riley analyst Craig Ellis launched coverage with a Buy rating and $61 price target, pointing to nearly 50% upside potential.
The Maryland-based quantum computing firm has been making strategic moves to strengthen its market position. CEO Niccolo de Masi, who took the helm in February after years on the company’s board, has been driving expansion efforts across multiple fronts.
Ellis highlighted IonQ’s rapid scaling of compute, networking, and space capabilities. The company has closed four deals since December 2024, with another transaction pending. This deal flow demonstrates growing commercial traction in the quantum computing space.
IonQ recently expanded its intellectual property portfolio to include more than 1,000 licensed, owned, or controlled patents and applications. Ellis views this patent portfolio as evidence of “a uniquely broad and deep pool of expertise” across quantum computing and networking fields.
The company has also strengthened its leadership team with key hires. Industry veteran Marco Pistoia joined IonQ in July to oversee industry relations after spending years in research roles at IBM and JPMorgan Chase.
Strong Financial Position Supports Growth Plans
IonQ maintains a robust financial foundation with a $1.6 billion pro forma cash balance as of its latest earnings report. This cash position represents approximately 12% of the company’s market capitalization, providing substantial resources for future operations.
Ellis believes this financial strength positions IonQ to “fund a path to late-decade profitability.” The analyst sees the company as well-capitalized to execute its long-term strategic roadmap.
The company generates revenue through two main channels. Consulting and support services account for just under 40% of total revenue this year. The remaining revenue comes from quantum computing as a service, which provides cloud-based access to IonQ’s quantum computing power.
Market Position and Competition
Ellis projects IonQ could capture between 15% and 40% of the quantum computing market by 2035. The company faces competition from established tech giants IBM and Google, as well as pure-play quantum firms Rigetti Computing and D-Wave Quantum.
Rigetti Computing has seen its own recent developments, including a collaboration with Montana State University and a $5.8 million Air Force contract for hybrid quantum network nodes. Both IonQ and Rigetti participate in Defense Advanced Research Projects Agency quantum computing initiatives.
The quantum computing sector has attracted intense investor interest over the past year. Pure-play competitors Rigetti Computing and D-Wave Quantum have posted quadruple-digit gains over the past 12 months, reflecting broader enthusiasm for quantum technologies.
Of 10 analysts covering IonQ stock, six rate it at Buy, two at Hold, and two at Sell according to FactSet data. The company trades with a current market capitalization of $12.1 billion and year-to-date performance of -3.90%.
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