IonQ stock price: Upside if Michio Kaku’s forecast is correct

on Sep 18, 2023
  • IonQ share price has been in a strong bullish trend this year.
  • The company’s revenue and bookings trend is growing.
  • Michio Kaku believes that quantum computing is the future.

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IonQ (NASDAQ: IONQ) stock price has done well this year, helped by the company’s revenue growth and artificial intelligence (AI). The shares surged to a high of $21.50, the highest level since December 2021. In all, the stock has jumped by more than 475% from the lowest level this year.

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Michio Kaku on quantum computing

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Michio Kaku is a distinguished professor specializing in quantum physics. In the past decades, Kaku has won numerous awards, including the Klopsteg Memorial Award and Sir Arthur Clarke Lifetime Achievement Award.

Kaku has written more than 70 papers in the industry and he developed a field known as string theory.  String theory is a field that attempts to merge quantum mechanics and Albert Einstein’s general theory of relativity.

Therefore, when Michio Kaku talks, people listen. And in a recent YouTube video, he argued that quantum computing will be the next revolution. He argued that the computing industry has gone through two main stages in the past few years: analog and digital.

Now, he believes that quantum computing, which handles data through qubits, will be the future. As such, this technology has room to change all industries like agriculture, energy, automotive, and defense.

Michio Kaku also believes that quantum computers are infinitely faster than digital computers. If he is correct, it means that companies building quantum computers could be key beneficiaries. 

IBM has been building supercomputers for decades, with its most advanced ones being able to transact up to 1 trillion web transactions daily. Its 100,000-qubit supercomputer is on the horizon.

IonQ stock price could benefit

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IONQ chart by TradingView

IonQ stock price could also be a key beneficiary of this trend. For starters, as I wrote here, IonQ is a small but fast-growing company that is building and commercializing quantum computers. It has a growing order book, pushing some analysts to compare it with Nvidia.

IonQ’S revenue rose to $5.2 million in Q2, up from almost zero in the same quarter in 2022. It also raised its bookings guidance to $52.5 million from the previous $50 million. It also expects that its annual revenue will be between $18.9 million and $19.3 million this year.

I believe that IonQ could generate more double-digit revenue growth in the future, which will push its stock higher. However, the biggest risk is that it is still making a lot of losses. In Q2, its net loss came in at over $43 million.

This means that IonQ will likely need to raise additional cash by 2025 since its cash and short-term investments stood at over $375 million. Another concern is that the company is still severely overvalued. 

It has a forward P/S ratio of 180, signaling that it is highly overvalued. The silver lining is that many pioneering companies like Tesla and Nvidia tend to always be perpetually overvalued.

In all, I believe that IonQ stock price has more upside in the coming years as the quantum computing industry grows.

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