IonQ, Inc. (IONQ): A Bear Case Theory

We came across a bearish thesis on IonQ, Inc. (IONQ) on wallstreetbets Subreddit Page by Infinite_Risk_2010. In this article, we will summarize the bears’ thesis on IONQ. IonQ, Inc. (IONQ)’s share was trading at $18.70 as of March 11^th.

A quantum computer on a countertop in an engineering laboratory with a technician at work.

IonQ (IONQ) lacks a commercially viable quantum computing product and offers no realistic timeline for one, with vague projections pushing meaningful breakthroughs to 2030. Quantum computing has long been a technology that remains perpetually “five years away.” Despite this, IonQ’s CEO has drawn dubious comparisons to 2015-era NVIDIA, even suggesting that Jensen Huang fears the company—claims that do not hold up under scrutiny. Recent market volatility was driven by NVIDIA’s Quantum Day, which temporarily boosted IONQ’s stock after Jensen and Mark Zuckerberg openly admitted that practical quantum computing is still decades away. Microsoft added to the hype with a blog post urging enterprises to be “quantum ready by 2025,” a move likely aimed at distracting from disappointing cloud sales. Meanwhile, the presence of CrowdStrike at Quantum Day raises an existential threat to IonQ, as the company will likely outline how its security solutions will neutralize the only viable long-term use case for quantum computing: encryption breaking. As the hype cycle collapses, IONQ faces a harsh reality check. With an overpromising CEO and no real commercial prospects, the stock presents an opportunity for shorts, with April hedges as a prudent risk management strategy.

IonQ, Inc. (IONQ) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held IONQ at the end of the fourth quarter which was 17 in the previous quarter. While we acknowledge the risk and potential of IONQ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than IONQ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.