IONQ (IONQ)
Down 38% in the past 6 months with a price to sales still in the 70s, we think IONQ still has a lot to offer given their extreme growth trajectory. Having beat their latest earnings call, analysts across the board are maintaining their Buy ratings and are forecasting 2X revenue growth in the coming 12 months. If IONQ can stick to this growth pattern then we are only 4 years away from a reasonable valuation, which compounded with any upwards revisions could see the valuation sustain itself while sending the stock soaring. At a $12B market cap, a 5X increase in share price could potentially happen should the technology take over as the next AI trend. And while this is admittedly unlikely to happen, IONQ does at least stand a good chance at beating the market over that time given its growth trajectory. The progress in quantum has been slow and steady and we have a hunch that tech marketers are going to want to include the word “quantum” in their product lineups sometime in the future. We have rated IONQ a Strong Buy and currently forecast a +22% increase over the next year.
D-Wave Quantum (QBTS)
Like IONQ, D-Wave is down considerably right now after losing around 32% year to date. QBTS currently commands a $7B market cap with a mind boggling valuation at a 240+ price to sales. For reference, a reasonable price to sales these days is around the 2-4 mark. However as you might expect, it also comes with incredibly high growth forecasts with some analysts projecting 86% year over year revenue increases over the next 3 years. This sort of growth could mean that an investor would have to wait 7-8 years to see a reasonable valuation, so investors should certainly be keeping an eye on revenue estimate revisions as these will seriously sway that timeframe. The average analyst rating is a Strong Buy with a +105% one year forecast, and we have also rated it a Strong Buy with a +38% projection over the coming year.
