Recommendation:

I recommend taking a short position on IonQ (NASDAQ: IONQ) over the next 12 months. IonQ is a $10 billion market cap company that focuses on the development of quantum computing hardware and software. While the idea of quantum computing is exciting to some, IonQ’s valuation of $40 per share is wildly inflated based on unrealistic growth expectations. 

-Quantum computing is in the early stage, similar to graphics processing 15 years ago, and quantum computing has huge growth potential

-Quantum computing has the potential to revolutionize the computing space and provide a better alternative to current systems 

-The applications for quantum computing are going to be in a multitude of high value sectors such as physics, medicine and cybersecurity 

-Quantum computing currently has very little real world application

-We are still several decades away from a quantum computer being viable for business and industries to use 

-The hype and speculation around quantum computing has caused the value of these stocks to rise to prices well above the fundamental value.

IonQ does not have an economic moat, and this is expected to never change. IonQ’s most advanced system has a processing power of 36 qubits. In comparison, IBM’s latest technology has processing power of 1000 qubits. Evidently, quantum is underperforming when it comes to processing and calculation power. In addition, IonQ has not established its quantum computing system as the default platform, meaning users are not tied down to the IonQ platform and will switch to a different company when new technology is released. There is nothing about IonQ’s technology and platform that will keep customers loyal and reliant on IonQ.

The company has projected a 90% annual growth rate, a figure that lacks any real-world demand. Using IonQ’s own projections, a discounted cash flow analysis yields a fair value of just $9.76 per share. This suggests that the current price reflects a more than 4x overvaluation. I recommend shorting the stock with a price target of $10, offering a potential return of 300–400%. The upside will come in the next several months when retail investors begin to lose faith and patience, they will begin to sell shares and look for the next trend. This is because the vast majority of IonQ is owned by retail investors, at 66%. The profit from this short sale is going to be realized when AI hype cools off, and as a result, the hype for quantum computing will subsequently falter. 

Quantum computing is often pitched as revolutionary, with supposed applications in fields like drug discovery, physics, and weather forecasting. However, the reality is far less promising. Current quantum machines cannot even perform basic tasks like factoring two-digit numbers. For instance, IBM’s Osprey failed to factor the number 15. If we can’t solve such elementary problems, how can we expect breakthroughs in drug development or meteorology?

Furthermore, quantum computing’s lack of applications is demonstrated by its small market share of about $1.01 billion (USD). Comparatively, the computer industry has a market value of over $450 billion (USD). There is simply a lack of demand for quantum computing when compared with typical computing.

NVIDIA CEO Jensen Huang recently stated that “very useful quantum computers are likely 15–30 years away”. At this stage, investing in quantum computing isn’t investing—it’s pure speculation.

But don’t just take my word that IonQ’s quantum computing is useless, former employees have publicly questioned the company’s practices, with one going as far as to say, “everyone knows IonQ is fake.” Such statements should raise serious red flags about the company’s credibility and long-term prospects. The employees are displaying a red flag from the inside, that something is clearly wrong at IonQ. When the core business is being described as “fake” by a former employee, investors need to take this with serious concern and reevaluate what they have purchased. It’s not just employees, in fact, a former executive is stated saying “pretty much everybody” in the field is skeptical: “it’s a lot of bullshit and in sort of a bubble.” Which reiterates my point of going short as the core business is useless. 

Quantum computing’s inability to be useful is best demonstrated in IonQ’s income statement. IonQ only had revenue of $43 million this past year, and of this revenue $25 million came from the U.S. government in the form of research grants. Meaning, only a minority of IonQ’s revenue comes from actual quantum computing. Especially considering the political climate, with the Trump administration looking to cut federal spending, IonQ is likely not going to receive more federal grants. 

IonQ is also attempting to position itself within the broader computing industry—a space dominated by giants like NVIDIA. The comparison is flawed. NVIDIA has established hardware, proven applications, and a robust AI ecosystem. IonQ, on the other hand, has no meaningful product-market fit, and quantum computing remains largely theoretical. Competing with NVIDIA in this landscape is not just difficult—it’s virtually impossible.

IonQ’s valuation is disconnected from reality. The technology isn’t close to viable, the competition is insurmountable, and insider reports suggest internal instability. At $40 per share, the company is trading at fantasy-level multiples. Short IonQ with a target of $10 per share. This trade offers a compelling risk-reward profile, with up to 300-400% return potential over the next 12 months.