Why IonQ Stock Is Crashing Today

IonQ (NYSE: IONQ) stock is getting crushed in Wednesday's trading. The quantum-computing specialist's share price was down by 38.3% as of 2:38 p.m. ET and had been down by as much as 47.8% earlier in the session.

That plunge followed public comments made by Nvidia CEO Jensen Huang about the outlook in the quantum-computing space. According to Huang, commercially viable quantum computers are likely much further away than many investors have been hoping.

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Comments from Nvidia's CEO just crashed IonQ stock

Speaking at Nvidia's analyst day event at the CES trade show in Las Vegas on Tuesday, the visionary tech leader said the following: "If you said 15 years for very useful quantum computers, that would probably be on the early side. If you said 30, it's probably on the late side. But if you picked 20, I think a whole bunch of us would believe it."

While quantum computing has broadly been perceived as a long-term project, some investors and industry experts have forecast that commercially viable applications of the tech could be ready sometime around 2030. Along with performance breakthroughs delivered by Alphabet's Willow chip and excitement surrounding potential applications in artificial intelligence (AI), the prospect of commercial deployment being roughly five years away helped spark an impressive rally for quantum stocks at the end of 2024. Now, Huang's comments seem to have poured cold water on that optimistic timeline.

What comes next for IonQ

Even after Wednesday's dramatic pullback, IonQ stock is still up roughly 133% over the last year. The company now has a market capitalization of $6 billion and is valued at approximately 72 times this year's expected sales. With that kind of growth-dependent and speculative valuation, it's possible that the company's share price will continue to tumble if investors continue to become more pessimistic about the timeline for commercially viable quantum computers.

Notably, Huang says he's excited about the long-term potential of quantum computers -- and he expects that his company will play a leading role in pushing the technology forward. But if it really does take another 20 years for commercially useful applications of the technology to arrive, smaller players like IonQ could have a hard time surviving through the intervening years.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.