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IonQ Before Q2 Earnings: Buy or Hold in a Balanced Risk-Reward Setup?

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Key Takeaways

  • {\"0\":\"IONQ stock jumped 86% in Q2, driven by global expansion and bold quantum technology initiatives.\",\"1\":\"Acquisition of IDQ and partnership with Intellian are expanding IONQ\'s footprint in Europe and Asia.\",\"2\":\"IONQ ended Q1 with $697.1M in liquidity and zero debt, supporting R&D and global strategic moves.\"}

IonQ (IONQ - Free Report) is set to release its second-quarter 2025 results tomorrow amid surging investor optimism influenced by rapid strategic execution. The company’s stock climbed an impressive 86% during the April-June quarter, fueled by bold moves in quantum networking, space-based communications and key acquisitions. On the heels of a strong first-quarter performance and the closing of its majority stake acquisition in ID Quantique, IonQ continued to expand its quantum footprint globally throughout the second quarter.

Let's delve deeper.

April-June Share Performance of IONQ

Zacks Investment Research
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Two Key Growth Drivers Ahead of Q2 Release

Accelerating Global Expansion Through New Partnerships: IonQ is strategically expanding its global footprint, particularly across Europe and Asia. The acquisition of a majority stake in Switzerland-based ID Quantique (IDQ) provides IonQ with immediate access to established commercial channels in European telecom and cybersecurity markets, especially in Germany, where demand for quantum-safe infrastructure is growing in both public and private sectors. Additionally, IDQ’s existing business in quantum random number generation and quantum-safe cryptography supports IonQ’s near-term revenue visibility outside the United States.

Also, IonQ’s partnership with Intellian, a South Korea-based player in satellite communications, marks a significant push into the Asia-Pacific region. The companies plan to co-develop infrastructure for space-to-ground quantum communications, extending IonQ’s reach into critical defense and telecom markets across Asia. These initiatives are expected to contribute positively to IonQ’s Q2 top-line results by expanding its addressable market and accelerating its international revenue stream.

Revenue Growth and Balance Sheet Strength: IonQ’s first-quarter 2025 revenues surpassed the midpoint of the company's guidance, reflecting strong early-year execution and growing commercial traction. Despite a net loss of $32.3 million and an adjusted EBITDA loss of $35.8 million, the company ended the quarter with $697.1 million in liquidity, giving the company a strong cash buffer with zero debt, enabling its strategic expansion, acquisitions and R&D investments. The balance increased due to the $372.6 million in gross proceeds from its at-the-market (ATM) facility.

The growing revenue base, as well as continued strategic investments through the months of the second quarter, likely supported an improving profit trajectory in the second quarter.

Competitive Positioning

As of mid-2025, Rigetti Computing (RGTI - Free Report) is facing headwinds despite posting a net profit in the first quarter, which was mainly due to a $62 million non-cash accounting gain from derivatives. Its core business performance was weak, with revenues dropping 52% year over year. While the company is progressing on its superconducting qubit systems like Ankaa-2 and Novera chips, investors remain skeptical about its ability to turn technical advances into real revenue. Rigetti, however, is strengthening its balance sheet by raising $350 million through an ATM equity offering.

Meanwhile, D-Wave Quantum (QBTS - Free Report) is showing momentum, especially in Europe and with enterprise clients. In the first quarter, QBTS generated strong revenues and significantly cut its net loss, helped by growing demand in industries like logistics, finance, and automotive. D-Wave’s launch of its Advantage2 system and real-world use cases have boosted confidence.

IONQ's Valuation and Estimates

The stock is currently trading at a lofty forward 12-month price-to-sales (P/S) ratio of 91.63, which is significantly higher than the industry average of 3.7. This exceptionally high forward P/S ratio raises the risk of a sharp pullback if second-quarter results or guidance disappoint.

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For IONQ, the Zacks Consensus Estimate for second-quarter 2025 loss per share has narrowed over the past 90 days to 13 cents, as you can see below. The estimated figure indicates a much narrower loss than the year-ago reported loss of 18 cents per share. The Zacks Consensus Estimate for Q2 2025 revenues implies year-over-year growth of 49.6%.

Zacks Investment Research
Image Source: Zacks Investment Research

Final Take

While IonQ’s global expansion and quantum networking moves are promising, continued operating losses remain a concern. With the stock trading at a steep premium, any earnings or guidance miss could spark a sharp pullback. Until Q2 results provide more clarity and with a Zacks Rank #3 (Hold), investors should avoid making fresh buy or sell decisions.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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