Typically, I loathe investing ideas generated from social-media communities such as “diamond hands,” or the concept that you buy shares of your target company irrespective of outside factors. However, when it comes to next-generation computer specialist IonQ (NYSE:IONQ), you might want to consider the wisdom of the masses. IONQ stock offers tremendous upside potential but you’ve got to be willing to absorb the risks.
First, let’s set the framework for why the company is so groundbreaking. Focusing on the quantum computing sector, two methodologies exist to forward the next generation of digitalized innovations: superconducting qubits and the far more revolutionary trapped ion. One of the basic reasons why IONQ stock has attracted much attention is that, alongside Honeywell (NYSE:HON), IonQ is one of the few companies actively developing trapped-ion computers.
That’s not to say that superconducting qubits are out of fashion. Indeed, major tech firms like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), IBM (NYSE:IBM) and Rigetti incorporate this methodology, in part because of familiarity. With superconducting qubits, producers can still incorporate standard fabrication technologies. Thus, as Ars Technica contributor John Timmer explains, participants can benefit from near-term semiconductor industry innovations.
However, Timmer also stated that superconducting qubits have issues. As “manufactured devices, they are neither perfect nor perfectly identical. As a result, their developers have had to find ways to work around a relatively high error rate and some qubit-to-qubit variability. While these issues have been improved, they’re very unlikely to ever go away.”
And that’s where IONQ stock becomes very intriguing. Timmer wrote, “The fundamental unit of a trapped-ion qubit, by contrast, is an atom, and all atoms of a given isotope are functionally equivalent and, quite obviously, don’t suffer from manufacturing flaws.”
In other words, trapped-ion computers have higher potential while the superconducting variant has more applicability right now.
IONQ Stock Is a Matter of Faith
Before you take a shot with IONQ stock, you’re going to want to perform your due diligence. By no stretch of the imagination am I a semiconductor expert. And sending me angry emails to sway my opinion one way or the other won’t change the narrative for the underlying company one iota.
Again, you’ve got to do your own research and make your decision off that analysis.
However, the reason why sentiment for IONQ stock is so strong likely ties into the “unlimited” potential of the tech firm. Trapped ions is an incredibly novel innovation. True, Timmer notes that through mechanisms like atomic clocks, “we’ve become adept at manufacturing the devices needed to hold ions in traps.” Still, trapped-ion computers are a massive leap.
On the other hand, companies like Alphabet’s Google are going for the sure thing. With superconducting qubits, you’re still dealing with physical contraptions. thus, the ability for Google and others to incorporate current-gen fabrication technologies. But theoretically, as the quantum computing industry scales up, those firms “playing it safe” could find themselves behind the innovation curve.
That’s not to say that IONQ stock is an easy play because of its trapped-ion tech. While we’re speaking about hypotheticals, it’s very possible that this groundbreaking solution is found to be incompatible for commercialization. That would render the research poured into the company moot, with IonQ becoming nothing more than a glorified lab queen.
But what does provide bulls hope, though, is the potential of trapped ions seems very real. Per Nature.com, their “operations are much less prone to errors and the delicate quantum states of individual ions last longer than those in superconducting qubits, which although small are still made of a very large number of atoms.”
IONQ Stock Is Well Worth Consideration
Another positive to consider regarding the novel approach is that “superconducting qubits tend to interact only with their nearest neighbours, whereas trapped ions can interact with many others, which makes it easier to run some complex calculations.”
Technically, it’s all compelling stuff and I do think it’s worth consideration for the risk-on portion of your portfolio. No, I wouldn’t bet the house on it, but if you’ve got time to marinate—I’m talking five years or more—IONQ stock needs to go up high on your watch list.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
