Shares of IonQ (IONQ -3.29%) fell 37.8% in February 2025, according to data from S&P Global Market Intelligence. The quantum computing researcher soared in fall 2024 thanks to a seemingly game-changing technology achievement by a larger competitor, but lost momentum in January as quantum fans were reminded that truly usable machines are many years away.

Investor enthusiasm continued to fade in February, accelerated by another gut check in the form of a mixed earnings report.

IonQ's quantum hype turned into a downward spiral

Here's a quick recap of the recent quantum computing boom-and-bust cycle:

1. The quantum computing research department of Alphabet (GOOG 2.34%) (GOOGL 2.34%) developed a new chip called Willow. This hardware came with record-breaking error correction performance and was able to complete an industry-standard benchmark test very quickly. The benchmark essentially proves that your machine is a quantum computer, though other systems could try to complete it by emulating the functions of a real quantum computer.
2. Many observers focused on how long it would take a traditional supercomputer to complete the same test. It's a very easy function for systems with quantum entanglement pairs and ridiculously hard for digital computers, so a leading supercomputer could work on it until the end of the universe with no results. Sounds impressive, but only if you don't think about the kind of test you're running.
3. All pure-play quantum computing stocks soared on this news. As the largest name in the business -- from a certain point of view -- IonQ shares rose 651% in the four months from Sept. 6 to Jan. 6.
4. Speaking at his company's annual analyst day in early January, Nvidia (NVDA 1.69%) CEO Jensen Huang clarified how long it will take to build a quantum computer of game-changing quality and performance. Fifteen years would be too quick, 30 years too slow, but 20 years sounds about right. IonQ and other quantum computing specialists plunged on that comment.

Some industry insiders have pushed back against Huang's analysis, arguing that the error correction improvements of Willow and innovative quantum particles later presented by Microsoft (MSFT 0.03%) could accelerate the timeline. But the stock skyrocketed too far, too fast, and are still giving back their massive gains over time.

A steeper price drop followed when IonQ reported fourth-quarter results on Feb. 26. The company collected more revenues than expected, but also showed a net loss many times larger than the consensus analyst estimate. More to the point, management's guidance points to approximately $85 million of full-year revenues in 2025 -- and an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of roughly $120 million. So the company will probably continue to burn cash for the foreseeable future.

Why IonQ faces an uphill battle

I hope you paid attention to the big names that really made a difference to quantum computing last month: Microsoft. Alphabet. Nvidia. I'm not just name-dropping these winners -- they are indeed leaders and innovators in this field. That's the type of competition IonQ is up against, and the list of heavyweight luminaries is much longer than that trio.

Even if IonQ ends up pursuing the most promising research projects on the market, the company would be a quick buyout target for any of these deep-pocketed tech titans. So the prospects of building real wealth with IonQ stock seem limited, but I see massive risks in holding these shares.

Quantum computing may indeed be a game changer in the long run, forcing cryptocurrencies to rely on quantum-resistant encryption and delivering huge breakthroughs in fields like medical research, financial modeling, and weather forecasts. But I'd much rather invest in this exciting industry through stocks like Alphabet or Microsoft than the far riskier single-issue specialists.

Meanwhile, IonQ stock is trading at a lofty 116 times sales and has a long way to drop before I'd even consider a speculative nibble.