Quantum Bubble Came So Early! Let Enjoy The Show.
@Mickey082024：
$IONQ Inc.(IONQ)$ Alright, guys, welcome back! So today, well, it's actually pretty early—only a couple of hours since the market opened. But yeah, a lot of the Quantum names are taking a hit, down 40-50%, with some dropping as much as 47%. Today, I want to talk about IonQ. We've discussed it a few times before, but I was also using the example of RGTI, saying it could play out similar to what we saw yesterday. If you haven't seen the chart from yesterday, let me show you again. This is what I was talking about regarding RGTI: we’re in a complacency phase, and at some point, we’ll go through stages like anxiety, denial, panic, and then capitulation. I also mentioned that this cycle repeats for large-cap stocks over a longer timeframe, but for smaller-cap stocks, it happens much faster, sometimes within a single day. I’ve also mentioned SoundHound in the past, where I saw a similar pattern, and I even included it in my teachable course where I document everything I observe in real-time. I made the comparison between RGTI and SoundHound. Now, focusing on IonQ, I was listening to the CEO talk about quantum computing during CES 2025, which was streamed recently. But to be honest, the CEO couldn’t even explain his own company’s product properly. I was pretty surprised by that. Someone asked about their current product’s performance, and the response was pretty vague. Also, the CEO of Nvidia recently commented on quantum computing, saying it could be 10, 15, or even 30 years before we have a quantum computer capable of solving real-world problems. This statement caused these stocks to take a dive, and the market reacted with a big sell-off. IonQ dropped 43% in one day, and at one point, it was as much as 49-50%. Similar stocks like QBTC, RGTI, and Cubit also saw significant drops. IonQ stock is up over 270% in 2024, marking a strong year for Quantum Computing stocks, driven by significant developments, particularly since October. One of the most notable catalysts was Alphabet's announcement of a breakthrough in Quantum Computing, which ignited interest in these stocks. With the question now being whether investors should buy IonQ stock for 2025, I’ll analyze the company's financials and performance metrics to help answer that. First off, as mentioned, IonQ's price action has been impressive, especially after October when the stock price surged. Before October, the stock was down for the year, and investors were losing money. However, now with just one trading day left in 2024, it’s up over 270%. So, it’s clear that investors have seen strong gains, but the question remains: What about 2025? Now, moving forward, let’s take a quick look at the chart. Last year, IonQ broke out of the $19 level, which had been resistance, and it’s been a bit choppy ever since. The 200-day moving average is currently at $14.33, so that’s the level I’m watching. I think any meaningful bounce in any of these Quantum names is a shorting opportunity for trader. I'm not giving financial advice, but for me personally, I’d not going to short if the stock bounces back up. Looking at IonQ’s revenue and cash flow, it’s gaining more acceptance as a product-as-a-service. For Quantum Computing stocks, IonQ's trailing 12-month revenue of $37 million is significant, making it one of the highest-grossing companies in the space. But, it’s still an early-stage industry, with companies like IonQ trying to establish themselves and find commercial applications for their quantum computers. Naturally, IonQ is operating at a loss, with cash flow from operations for the trailing 12 months at a negative $93 million. In situations like this, the balance sheet becomes incredibly important. For large companies like Apple or Microsoft, a balance sheet might not be as critical since they generate billions in cash flow. But for a company like IonQ, it’s crucial. Fortunately, IonQ has $30 million in cash and zero long-term debt, which is a strong balance sheet. That said, they’re burning through about $7-$8 million per month, which means they have roughly three to four months of cash remaining. The good news is they have no debt, so they could potentially raise funds through debt or equity. The recent surge in stock price also offers a potential opportunity for the company to sell shares to raise capital, which could strengthen their balance sheet and give them more runway. When evaluating valuation, I typically look at the price-to-earnings ratio, but with IonQ, we don’t have earnings yet, as it’s still losing money. Instead, I look at the price-to-sales ratio, and here, IonQ is relatively expensive. Despite the stock price increase, there hasn’t been a corresponding increase in sales, profits, or cash flow. This increase in price seems driven more by enthusiasm and momentum rather than solid financial performance, which introduces additional risk. Looking at IonQ's earnings per share projections, the losses are expected to continue for the next few years. In 2024, the company is expected to lose about 87 cents per share, and the losses are projected to grow in 2025 to 99 cents per share. The losses are expected to remain substantial into 2026 and 2027, with an improvement in 2027 to around 48 cents per share. It’s likely that IonQ will continue losing money for quite a while, likely until the next decade. So, with all this in mind, should investors buy, hold, or sell IonQ stock for 2025? While the company has significant potential due to its research and progress in Quantum Computing, the stock’s price has already risen substantially, and its valuation is high. Given that, I don’t think the potential rewards justify the risks at this moment. For now, I’d rate the stock as a hold for 2025. These stocks are showing death candles, and the downturn was coming, regardless of whether Nvidia’s CEO caused it. It’s a bubble bursting. We’ll likely see a denial phase for a while, where people still hold onto the idea that these companies will recover. But ultimately, this is the phase where things are panicking, and we might see a slight uptick as people digest the anxiety of the sell-off. But for now, it’s a denial moment. @Daily_Discussion @TigerPM @TigerObserver @Tiger_comments @TigerClub
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