Why IonQ Stock Soared 237% in 2024 (and Then Crashed This Year)

Despite its less-than-stellar start, IonQ (NYSE: IONQ) stock ended 2024 on a high note: It closed 237% above its 2023 closing price, according to data from S&P Global Market Intelligence. Continued triple-digit revenue growth not only verified commercial demand for the company's quantum-computing technology, but got investors' attention as well.

Since the beginning of 2025, however, much of that gain has been wiped away. Once a high-profile technology CEO voiced doubts, IonQ stock suddenly declined. Its current price of near $30 per share is more than 40% below its early-January 2025 peak.

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Yet the steep sell-off is more of a buying opportunity than a concern. Here's why.

IonQ continues to gain growth-driven altitude

Quantum computers aren't exactly a new idea. The premise of using the quantum properties of subatomic particles as the basis for hyperfast computing has been the subject of several successful experiments for years now.

It hadn't been particularly well commercialized, though, until pure play IonQ came along. Revenue-bearing bookings of its quantum-computing platforms began accelerating in the latter half of 2022:

IONQ Revenue (Quarterly) data by YCharts.

Although most paying customers are only testing to see what they might be able to achieve with this tech, IonQ's clients so far include some impressive names. The list includes the U.S. Air Force Research Laboratory, and the Applied Research Laboratory for Intelligence and Security (ARLIS); IonQ also has developmental partnerships with Oak Ridge National Laboratory and with Nvidia (NASDAQ: NVDA).

Based on the caliber of commercial interest last year, investors bid up shares, anticipating further expansion of the technology.

Then it all came crashing down. Just this week, Nvidia CEO Jensen Huang said that useful commercial application of quantum computers was still two decades away. After his comment, several quantum-computing stocks -- including IonQ -- crashed.

Last year's buyers were on the right track, even if a bit overzealous

Is Huang right?

To be fair, there's still a lot of work to be done to realize quantum computing's full potential. Current error rates of roughly 1 per 1,000 operations need to fall to roughly 1 per trillion in order to make quantum computing useful. And it could take time for other would-be clients to figure out how to use this tech differently from artificial intelligence or from more conventional computing. The industry needs more software to integrate quantum computing applications with existing conventional IT infrastructure.

Do take Huang's skepticism with a massive grain of salt, though. IonQ is doing real commercial work in quantum computing right now, as is rival quantum-computing company D-Wave Quantum (NYSE: QBTS). Notably, one of D-Wave's current paying customers is Mastercard, which is tapping D-Wave's tech in an effort to reduce fraud, handle cross-border settlement, and more. Meanwhile, IonQ has been successful selling all of the capacity it's added over the course of the past several quarters.

Given that quantum computing is already being monetized even before it's perfected, Huang's 20-year time frame feels far too pessimistic. This year's discount from last year's big run-up in IonQ shares looks like a prime entry opportunity.

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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard and Nvidia. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.