'Time to Hit the Brakes?' Top Analyst Downgrades IonQ Stock amid Profit Concerns
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While the revenue beat suggests strong demand, the wider-than-expected loss raised concerns about cost control and operational efficiency.
Key Reasons for Downgrade
Platt said that IonQ is investing heavily in quantum computing, which could become a breakthrough technology. However, he's concerned about the company's lack of clear plans and uncertain path to making money in the short to medium term. Also, he believes the risks tied to its business have 'notably increased.'
Morgan Stanley Analyst Ups Target
On the other hand, Morgan Stanley's Joseph Moore raised IonQ's price target to $32 from $30, keeping a Hold rating. He sees a big long-term opportunity in quantum tech, especially for AI and simulation.
The five-star analyst believes the quantum market could reach $65 billion by 2030, and AI could top $200 billion. Moore noted that IonQ might compete with big chipmakers and has more upside than private rivals.
IonQ's Quantum Leap
IonQ is making major progress in quantum computing. Its hybrid quantum-classical computing has improved accuracy in tasks like sentiment analysis and could save energy as more qubits are added. This approach also helps in areas like materials science, biology, and language processing.
Further, IONQ is moving into quantum networking, with plans for a space-based system to share secure keys. Notably, its products are already used by big banks, telecoms, and government agencies to protect against future quantum hacking.
Importantly, IonQ is working with hyperscalers like Amazon's (AMZN) AWS, Microsoft (MSFT) Azure, and Google (GOOGL) Cloud, and has launched a quantum application center with AstraZeneca (AZN) focused on drug discovery. It's also exploring engineering simulations for manufacturing.
Is IonQ a Good Buy?
Turning to Wall Street, IONQ has a Strong Buy consensus rating based on five Buys and two Holds assigned in the last three months. At $49.17, the average IonQ stock price target implies 21.44% upside potential.
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