TLDR
- Amazon disclosed a $36.7 million stake in quantum computing company IonQ through a 13F SEC filing
- The investment represents 854,207 shares purchased as of June 30, 2024
- IonQ stock jumped over 7% in after-hours trading following the disclosure
- Wall Street expects IonQ to report Q2 earnings with a $0.29 loss per share on $17.23 million in sales
- Analysts maintain a Strong Buy rating with a $49.17 average price target
Amazon made waves in the quantum computing sector Tuesday when it disclosed a $36.7 million investment in IonQ. The e-commerce giant’s 13F SEC filing revealed ownership of 854,207 shares in the quantum computing company.
IonQ stock responded immediately to the news. Shares jumped over 7% in after-hours trading following the disclosure.
The investment marks a new addition to Amazon’s portfolio. The company already holds stakes in AMD, Marvell Technology, Rivian, and Vital Farms.
IonQ had already gained momentum during regular trading hours. The stock climbed 5.4% to $42.02 on Tuesday, reclaiming its 50-day moving average.
The timing of Amazon’s disclosure creates extra buzz around IonQ’s upcoming earnings. The company reports second-quarter results after market close Wednesday.
Wall Street analysts expect challenging numbers from the quantum computing firm. Forecasts call for a diluted loss per share of $0.29 on revenue of $17.23 million.
Amazon’s Strategic Play
Amazon’s investment reflects growing confidence in quantum computing technology. The company appears to be positioning itself for the next major tech wave after competing in artificial intelligence.
Bank of America strategists believe quantum computing could reach practical use by 2033. Some analysts think the technology may have greater market impact than AI.
IonQ’s trapped-ion quantum computing technology offers key advantages over competitors. The approach delivers higher fidelity, lower error rates, and more reliable operations compared to other qubit types.
D-Wave Computing and Rigetti use different quantum computing approaches. IonQ’s technology stands out for its accuracy and reliability in quantum operations.
The partnership between Amazon and IonQ already exists through Amazon Web Services. IonQ’s systems, including IonQ Forte and Forte Enterprise, are available on Amazon Braket.
Amazon Braket serves as AWS’s quantum cloud service platform. The service helps companies access quantum computing tools for drug discovery and climate modeling applications.
Hardware Innovation Drive
Amazon has developed its own quantum hardware innovations. The company’s Ocelot chip aims to reduce quantum error correction costs by 90%.
This cost reduction could make quantum chips five times cheaper than current methods. The innovation potentially advances practical quantum computing by up to five years.
Amazon’s investment in IonQ expands its presence in quantum hardware and cloud services. The strategy positions the company across multiple quantum computing market segments.
IonQ stock carries a consolidation buy point at $48.94. The overnight price action following Amazon’s disclosure could signal an early entry opportunity.
Analysts remain bullish on IonQ’s long-term prospects. TipRanks shows a Strong Buy consensus rating based on six Buy recommendations and one Hold.
The average price target of $49.17 implies 17% upside potential from current levels. Over the past year, IonQ stock has surged more than 482%.
IonQ will kick off earnings season for quantum computing companies with its Wednesday report. The results could provide insight into the sector’s growth trajectory and commercial progress.
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