By Mackenzie Tatananni
There's no question about it: the quantum computing hype train has taken off.
Pure-play peers Rigetti Computing and D-Wave Quantum have seen quadruple-digit gains over the past 12 months. And another challenger has emerged: IonQ, the College Park, Md.-based company that aims to become the " Nvidia of quantum computing," to quote CEO Niccolo de Masi.
B. Riley analyst Craig Ellis was the latest to join the chorus of support as he initiated coverage on IonQ with a Buy rating and $61 price target, suggesting nearly 50% upside to Wednesday's closing price. Shares ended the session up 1.6% at $40.79.
"Fast moving IONQ is led by an experienced executive suite, is attracting senior blue-chip talent, and has closed four deals since December 2024, with another pending; it is also sharply scaling up its compute, networking, and space capabilities," Ellis wrote.
The company said last week that it had scaled up its intellectual property portfolio to include more than 1,000 licensed, owned, or controlled patents and applications.
The patents, which evidence "a uniquely broad and deep pool of expertise" across the fields of quantum computing and networking, show IonQ will be able to put down roots across the industry, Ellis said.
There have also been changes on the leadership front. Current CEO Niccolo de Masi took the helm in February after spending years on IonQ's board and, before then, serving as a director of the special purpose acquisition company that brought IonQ public in 2021.
The hiring of industry veteran Marco Pistoia has deepened the company's management. After years spent on the research side at IBM and JPMorgan, Pistoia announced in July that he was leaving the bank to oversee industry relations at IonQ.
Ellis noted that the quantum computing company had a $1.6 billion pro forma cash balance as of the time of its latest earnings report, representing around 12% of its market capitalization. With this in mind, the company appears "robustly positioned to fund a path to late-decade profitability," Ellis wrote.
In an interview with Barron's earlier this year, IonQ CEO Niccolo de Masi pointed out that the company had been consistently growing revenue since making its public debut. "We are focused on, of course, winning technologically, but also running commercially," de Masi said. "Our systems do useful stuff today and we're getting paid for that."
IonQ generates revenue from consulting and support services as well as the sale of quantum computing power and hardware, which Ellis sees as two distinct categories. The former bucket has accounted for just shy of 40% of revenue this year, the analyst noted.
Quantum computing as a service, which offers access to IonQ's quantum computing power and related services over the cloud, is "ideal for incentivizing commercial adoption and building a developer ecosystem," Ellis added.
He likened IonQ's multipronged business model to that of pure-play peer Rigetti Computing. B. Riley issued its first rating on the stock last year and current rates it at Buy with a $19 price target. Shares rose 0.6% to $15.39 on Wednesday.
As long as IonQ executes on its road map, Ellis believes the company could capture anywhere from 15% to 40% of the quantum computing market by 2035. Other key players include tech behemoths IBM and Google, while Rigetti and D-Wave Quantum also stand a fighting chance.
Rigetti's name has been in the news as of late. The company unveiled a collaboration with Montana State University last week, making MSU the first academic institution to boast an on-premises Rigetti computer.
Other developments have been brewing below the surface. According to a notice published Friday, Berkeley was awarded a U.S. Department of Defense contract on Aug. 13. The notice names Rigetti as the recipient of an Air Force contract titled "Hybrid Superconducting-Optical Quantum Network Nodes" with a total value of more than $5.8 million.
The Berkeley, Calif.-based company has a longstanding relationship with the military branch, specifically the Air Force Research Laboratory. Rigetti and IonQ were also among the companies selected for a multiyear quantum computing initiative under the Defense Advanced Research Projects Agency, a research arm of the DOD.
Of 10 analysts polled by FactSet, six rate IonQ stock at Buy, two at Hold, and two at Sell, while Rigetti is rated at Buy by all eight firms surveyed.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
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August 27, 2025 18:06 ET (22:06 GMT)
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