Move over, artificial intelligence (AI) -- quantum computing could be this year's hottest investment topic.

It's easy to understand why. Quantum computing utilizes quantum mechanics to unlock a level of computing technology beyond the scope of what's possible today. For example, Alphabet recently announced a quantum computing chip capable of performing a benchmarking task in under five minutes, which today's leading supercomputers would take 10 septillion (10,000,000,000,000,000,000,000,000) years -- longer than our universe has existed.

IonQ (IONQ 0.49%) has made waves on Wall Street as a contender in the quantum computing space. It is racing to hone its technology and capture a market that could grow to an estimated $87 billion over the next decade. The potential is enticing, but should investors buy the stock today?

It's not clear when quantum computing will meaningfully arrive

There tends to be a lag between technological breakthroughs and their real-world impact. The internet burst onto the investing scene in the late 1990s, but it took many years (and a stock market bubble) later for widespread adoption in society. It created new markets, but those came even later.

The smartphone didn't take off until Apple released the first iPhone in 2007, and cloud computing didn't take off until the 2010s. AI is just starting to change the world, but leading AI developer OpenAI was founded in 2015. These game-changing revolutions take time.

Quantum computing's breakthroughs are exciting, but translating the technology into meaningful business opportunities has a long road ahead. Quantum computing is still new and unrefined. The quantum mechanics behind the computing technology are highly volatile and sensitive to their environment, creating computational errors. Limiting those errors is still a significant hurdle.

Additionally, almost no software or infrastructure exists to apply quantum computing to real-world applications. Earlier this year, Alphabet CEO Sundar Pichai estimated that practical quantum computers were at least five to 10 years out. It's clear that quantum computing is a high-potential market opportunity, but realizing that potential might still be years away.

This makes it tough to quantify what investors are buying today

IonQ is developing quantum computers for enterprises. It sells access to its Forte system, which currently has 36 algorithmic qubits (more qubits indicate more computing power). This year, it plans to sell its Tempo system (targeting 64 qubits) for data centers. It's encouraging to see revenue, but it's in a limited fashion because of how new this all is.

The company generated just $43.1 million in revenue in 2024, and management expects $75 million to $95 million in 2025. The drawback is that IonQ's current $4.5 billion market cap translates to a price-to-sales ratio between 49 and 60 using 2025 revenue, depending on whether it lands in that guide's low or high end.

IonQ's valuation is quite expensive, especially given the many unknowns. For example, investors don't know when the business might turn a profit. IonQ's 2024 net losses ($331 million) far exceeded its revenue. Plus, there is competition in quantum computing, ranging from similar start-ups like Rigetti Computing to established technology giants, including IBM, Alphabet, Microsoft, and Amazon.

In other words, investors don't know what they're buying today. Nobody knows what the quantum computing market will become in the next five years, how much of that market IonQ will capture, or what sort of margins or profits IonQ's business will generate. That doesn't even factor in the risks of development delays or research setbacks. Again, this is brand-new technology and very much under development.

That's a lot of blanks to try and fill in when trying to value a company and stock.

Should you buy IonQ?

Investing is sometimes about weighing the potential reward versus the risks involved. Sure, IonQ could become a powerhouse in quantum computing. The issue is that the stock is already valued as if it's a given when it's not. If things don't work out as investors hope, the stock has an immense downside from its current price.

If IonQ were trading at a far lower price, buying the stock as a speculative investment in a diversified portfolio would make sense. Unfortunately, it's too risky to justify buying at these lofty prices. Investors interested in IonQ should keep the stock on their watchlist for now and reevaluate at a lower price or as new business developments emerge.