TLDR
- Morgan Stanley disclosed a 7% stake in IonQ worth 18.4 million shares through an SEC filing
- Amazon also holds a $36.7 million stake in the quantum computing company from earlier in 2024
- IonQ has a $12 billion market cap but generated only $50 million in revenue over the past year
- The company uses trapped-ion technology instead of the more common absolute zero cooling approach
- CEO projects IonQ will reach profitability by 2030 with nearly $1 billion in annual revenue
Morgan Stanley has positioned itself in the quantum computing sector with a substantial stake in IonQ. The Wall Street giant disclosed ownership of 18.4 million shares, representing about 7% of the company.
The disclosure came through an SEC Schedule 13G filing from August. Morgan Stanley Investment Management holds the stake across pooled investment vehicles for pensions and endowments.
This follows Amazon’s earlier disclosure of 854,207 IonQ shares valued at $36.7 million. The tech giant had been accumulating shares throughout 2024 before making the formal disclosure.
IonQ stands out in the quantum computing space with its current $12 billion market cap. However, the company generated just over $50 million in revenue over the past 12 months.
Most of this revenue comes from contracts and partnerships rather than direct sales. The company operates more like a pre-revenue biotech firm at this stage.
IonQ’s CEO has made projections for the company’s future growth. He expects profitability by 2030 with nearly $1 billion in annual revenue.
The company forecasts an $87 billion market opportunity by 2035. Even capturing 10% of this market could drive substantial returns for early investors.
Technology Approach Sets IonQ Apart
IonQ uses trapped-ion technology for its quantum computing systems. This differs from competitors who typically cool particles to near absolute zero.
The trapped-ion approach offers high accuracy without extreme cooling requirements. However, it operates at slower processing speeds compared to other methods.
IonQ’s current systems, the Forte and Forte Enterprise, support 36 algorithmic qubits. These early-stage machines target specialized optimization and simulation problems.
The company is developing Tempo, its next-generation series. Tempo aims to push trapped-ion technology into utility-scale applications.
This upcoming platform could compete directly with classical supercomputers on real-world problems. Target areas include logistics optimization, material discovery, and machine learning.
Investment Landscape Changes
The institutional backing reflects quantum computing’s evolution from research to potential commercial deployment. Traditional financial institutions are taking notice of the sector’s possibilities.
IonQ went public in October 2021 as the first pure-play quantum computing company on the NYSE. The company was founded in 2015 based on over two decades of academic research.
Niccolo de Masi joined as president and CEO in February with a mandate to scale technology and sharpen commercial strategy. His appointment signals the company’s focus on moving toward commercialization.
The presence of major investors like Morgan Stanley and Amazon provides legitimacy to the quantum computing space. It also brings increased liquidity to IonQ’s shares.
Despite the institutional interest, quantum computing remains at the technology frontier. Current systems are still error-prone and difficult to scale effectively.
Investment managers are taking diversified positions across emerging technologies. Small stakes could grow substantially if the quantum sector delivers on its technical promises.
For retail investors, a modest position in IonQ requires careful risk management. Even a 625% return from a 1% portfolio allocation would provide substantial portfolio benefits.
The company’s trapped-ion approach represents one of several competing quantum computing methods. Time will determine which technical approach proves most viable for commercial applications.
IonQ’s growing institutional investor base now includes some of the world’s largest financial institutions. This backing provides the company with increased credibility as it works toward commercial quantum computing applications.
