The next breakthrough technology to follow artificial intelligence (AI) could be quantum computing. In February, Amazon joined other big tech firms, such as Google parent Alphabet, in touting investments in the field.

Now may be a good time to invest in one of this nascent industry's hot stocks, IonQ (IONQ 10.15%). Recent stock market volatility pushed down the share price of this quantum computing luminary.

IonQ's stock was on fire earlier this year, soaring to a 52-week high of $54.74 in January. Since then, President Donald Trump's tariff policies injected uncertainty into the U.S. economy, and as a result, the stock market fell. IonQ shares were not spared, tumbling 55% from its high at the time of this writing.

Does IonQ's share-price plunge present a buy opportunity? Or do reasons exist to avoid the stock? Here's an exploration of the company to assess whether it's a worthwhile investment for the long haul.

IonQ's business performance

IonQ is one of a handful of publicly traded, pure-play quantum computing companies, and it's enjoyed plenty of success in the past year. For starters, it ended 2024 with 95% revenue growth to $43.1 million.

In April, IonQ launched its flagship Forte Enterprise quantum computer onto Amazon's cloud-computing infrastructure. This enables global customers convenient access to Forte's capabilities, contributing to IonQ's ability to grow sales.

In addition, the company acquired Qubitekk, a business specializing in quantum computer networking, in November. The acquisition is important because IonQ is racing to build a network of connected quantum computers.

Today's AI systems rely on computer networking to deliver potent computational power. Doing the same with quantum machines could be a strong competitive advantage, especially since just a single quantum device is far more powerful than any supercomputer.

Adding to the impactful year, in February, IonQ gained a new CEO, Niccolo de Masi. de Masi is a seasoned CEO, and that experience can help the company with its growth.

IonQ's challenges

While IonQ's 95% year-over-year sales increase was spectacular, building the specialized hardware needed for quantum computers is not cheap. The company ended 2024 with a net loss of $331.6 million.

Many fast-growing tech companies operate for years without reaching profitability. Amazon is one famous example. However, IonQ's 2024 net loss was more than double the $157.8 million it lost in 2023 as costs skyrocketed. For example, research and development expenses alone grew 48% year over year to $136.8 million.

This is a concern, and for that reason, IonQ decided to raise more capital through an equity offering. But that also dilutes shareholder holdings, because the increase in total shares reduces their percentage of ownership.

Rising costs also raise the question of whether IonQ's business can sustain the years of investments needed to achieve widespread adoption of its technology. Quantum computing is in its infancy. At this time, calculations made by quantum machines are prone to errors that make them difficult to scale.

Consequently, the technology is estimated to be years away from quantum advantage. This is the point when a quantum machine is capable of replacing today's classical computers.

So, de Masi may need to start reining in expenses, or the situation could become financially untenable. But whether he can do so in a way that doesn't hamper growth is the challenge.

To buy or not to buy IonQ stock

For the time being, IonQ's financial situation is not dire. It exited 2024 with an excellent balance sheet. Assets totaled $508.4 million compared to $124.5 million in total liabilities. Its recent equity offering brought in an additional $372.6 million.

It's also continuing to capture sales. This month, IonQ was among the businesses selected by the Defense Advanced Research Projects Agency (DARPA) to join an initiative seeking to build reliable, scalable quantum computers by 2033.

After its share price drop, one factor to look at before deciding to buy IonQ stock is its price-to-sales (P/S) ratio. This metric is commonly used to assess stock valuations for companies that are not profitable.

Data by YCharts.

Although IonQ's P/S multiple is significantly lower than at the start of 2025, at the time of writing, it's still elevated from where it was before November when the stock started soaring. This suggests shares are still pricey, so it's worth waiting to see if the stock drops further.

But even if that happens, IonQ is a risky company to invest in. Its tech is likely years away from broad adoption, costs are rising substantially, and it faces competition from bigger players with deep pockets, such as Amazon and Alphabet. So only investors with a high risk tolerance should consider investing in IonQ.