Whenever a new megatend emerges, it is not uncommon for small businesses before little known to suddenly become household names. Under the umbrella of artificial intelligence (AI), an area known as quantum calculation started to receive disproportionate attention.
On the surface, you might think that a new hot opportunity would lead to a new conviction in the biggest players in AI: Nvidia,, Microsoft,, AlphabetOr Amazon. But investors sometimes become exhausted by seeing the same names appear again and again, which leads them to start digging for new opportunities – looking for the next great thing.
Regarding quantum computers specifically, a small company known as Ionq(Nyse: ionq) Quickly became a little darling. Although his actions have skyrocketed 222% in the last six months, CEO Niccolo de Masi has just called for ages – which could potentially suggest that generational gains could be in store.
Could the investment in Ionq be like buying Nvidia actions before the AI revolution?
The IT industry has experienced many different phases over several decades. The advent of the central processing unit (CPU) was a giant step in the development of modern IT. The processors treat instructions through a series of sophisticated architectures and circuits and play a major role in the effectiveness of personal computers. These chips are a powerful general use material, capable of managing almost all kinds of computer tasks. In the 1990s, Intel was one of the main players in processing processors for personal computers.
Throughout the early 2000s, graphic processing units (GPU) gained popularity in the world of technology thanks to their ability to improve visuals for video games. Their design makes them more specialized – they use a massively parallel treatment, which gives quick results. But this power is only useful for specific types of repetitive and highly parallel computer tasks – hence the need for GPU and CPU. While Nvidia was the main pioneer in GPU development, Advanced micro-apparents More recently, emerged as a contributor to the GPU industry. Currently, GPUs may be the most critical infrastructure element fueling the current IT era, because the development and training of generators’ applications require exactly the type of parallel processing power that these chipsets can provide.
But now, the technological sector is turning to the emerging technology of quantum computers, which processes data in an entirely different way from that of traditional computers. By putting aside the complexities of their operation and why, it is enough to say that quantum machines can quickly solve certain types of rare problems which would take years of conventional supercalculators – but quantum IT has little use of the real world today. However, some enthusiasts suggest that it could be the next phase of computer science, making it a potentially lucrative and tempting area in which invest.
During a recent interview on CNBC, the CEO of IONQ proclaimed that the company is the “800 pound gorilla” in the landscape of quantum computer science and compared its future to that of Nvidia before the AI revolution.
During the interview with Masi, he compared the current state of Ionq to the place where Nvidia was about 10 years ago. Let’s take a look under the hood to see if this comparison is appropriate.
In the 20215 NVIDIA fiscal year, which ended on January 25, 2015, the company generated $ 4.7 billion in revenue and approximately $ 631 million in net revenues. At the time, Nvidia’s market capitalization was around $ 11.3 billion.
Ionq is a much smaller business today than Nvidia ten years ago. In addition to this, the IONQ burning burning rate has actually increased because its growth in income shows signs of acceleration. Although this may indicate that the company is in common in research and development, it is difficult to justify an increase in losses for a business that has so little income to start.
Image source: Getty Images.
In my opinion, comparing Ionq today to what Nvidia was before the AI revolution is ill -aligned. Currently, IONQ shares are negotiated at a price / sales ratio (P / S) well greater than 100. In comparison, Nvidia was negotiated at a multiple P / s of only 2.4 at the beginning of 2015.
The disparity between these levels of evaluation suggests that investors may not have understood the potential of Nvidia a decade ago. At that time, relatively few spectators recognized the potential that the power of GPUs was constructively applied in fields beyond video games and other information related to the image. Consequently, Nvidia exchanged a modest multiple despite her growing and profitable business. Investing in ionq’s shares today is not like that – it is a much higher bonus.
In addition, IONQ’s evaluation has multiplied in a few months. Even with a significant withdrawal, the stock would probably be overvalued, given the low traction of the company’s sales and the high rate of cash burns. Although there is an argument to argue that investment in quantum computers today could be like making an early bet on the rise of the megatend IA, I would not do it. There are a lot of things that must still be developed and discovered before quantum computers reaches the point where it is practical technology – and this could take decades to get there.
Unless you have this level of patience with your investments, as well as a tolerance for volatility pronounced along the way, I would not invest in IONQ actions at the moment.
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John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of Motley Fool’s. Suzanne Frey, director of Alphabet, is a member of the board of directors of Motley Fool’s. Adam Spatacco has positions in Alphabet, Amazon, Microsoft and Nvidia. The Motley Fool has positions and recommends micro advanced devices, alphabet, Amazon, Intel, Microsoft and Nvidia. The Motley Fool recommends the following options: Long January 2026 $ 395 Calls on Microsoft, short January 2026 405 $ calls Microsoft and short May 2025 30 $ calls Intel. The Word’s madman has a Disclosure policy.
