IonQ Inc. shares closed Thursday at $58.89, up 12.24%, as quantum-computing stocks surged following the U.S. Commerce Department's announcement of $2.013 billion in planned incentives for the sector. The broader market saw modest gains, with the Dow up 0.55%, the S&P 500 up 0.17%, and the Nasdaq up 0.09%.
Federal Funding Details
The Commerce Department's incentives are aimed at building "fault-tolerant" quantum computers, machines designed to operate reliably despite errors. Quantum computing relies on qubits, which can represent multiple states simultaneously. The official recipient list included IBM, GlobalFoundries, Atom Computing, Diraq, D-Wave, Infleqtion, PsiQuantum, Quantinuum, and Rigetti, but not IonQ. Reuters reported that IBM would receive $1 billion, GlobalFoundries $375 million, and D-Wave, Rigetti, and Infleqtion about $100 million each. Infleqtion CEO Matthew Kinsella told Reuters the awards signaled that "quantum computing is coming much faster than anybody thinks."
IonQ's Recent Performance
Despite not receiving direct funding, IonQ posted strong quarterly results. The company reported first-quarter revenue of $64.7 million, a 755% increase year-over-year, and raised its full-year revenue outlook to between $260 million and $270 million. It also reported $470 million in remaining performance obligations, representing contracted revenue not yet recognized, while guiding for an adjusted EBITDA loss of $330 million to $310 million. Adjusted EBITDA is a non-GAAP measure of operating profit before interest, taxes, depreciation, amortization, and certain other costs.
Analyst Skepticism and CEO Comments
D.A. Davidson analyst Alex Platt told Reuters that investors still had "skepticism" about the "viability of the technology" and IonQ's path using trapped-ion qubits, which involve charged atoms controlled by lasers and electromagnetic fields. IonQ CEO Niccolo de Masi told Reuters that "profitability is not a key focus this year," emphasizing the company's priorities on revenue growth and research spending.
Expansion and Merger Developments
IonQ has been working to translate its research into manufacturing. On May 12, the company announced the opening of a 22,000-square-foot quantum R&D and semiconductor chip-testing lab in Boulder, Colorado, with the first quantum computer planned for full installation later this year. De Masi said IonQ was "excited to tap into" Boulder's skilled workforce. Additionally, a May 8 filing revealed that SkyWater Technology stockholders approved the merger agreement with IonQ, with approximately 67% of outstanding shares represented and 32.6 million shares voted in favor. The transaction will make SkyWater a wholly owned IonQ subsidiary through a two-step merger.
Market Implications
IonQ enters Friday's session with strong momentum, a higher sales forecast, and a pending foundry deal. However, investors must weigh these positives against the reality that competitors have received direct federal backing, the regulatory and integration risks associated with the SkyWater merger, and the uncertain commercial timelines in the quantum computing market. U.S. markets are scheduled to trade normally Friday, with the NYSE closed Monday, May 25, for Memorial Day.
