IonQ prices $1B equity offering to speed up its push into quantum networking

Shares of the quantum computing pure play IonQ Inc. gained greater than 6% today after it announced a $10 billion equity offering priced far above its recent stock value.

The corporate’s latest offering was priced at $55.49 per share, which is around 25% dearer than the stock’s closing price on July 3. The sale encompasses 14,165,708 common shares plus “pre-funded warrants” for an additional 3,855,557 shares, along with seven-year warrants to amass one other 36,042,530 shares at a price of $99.88 per share.

IonQ said Heights Capital Management has agreed to purchase the securities via J.P. Morgan, which is underwriting the offering. The investment will support the quantum computing leader’s research and development efforts and an expansion into quantum networking.

“IonQ will profit from a balance sheet of roughly $1.68 billion of pro-forma money as of March 31, 2025, underwriting our sustained growth and pioneering quantum commercialization worldwide,” commented IonQ President and Chief Executive Niccolo de Masi.

Based on the corporate, the offering is the biggest single-institution common stock investment in any quantum computing provider so far, and validates its technology, roadmap, mental property and talent.

Maryland-based IonQ is widely thought to be considered one of the leaders within the quantum computing industry. But like its peers, it has an extended option to go before it will possibly successfully commercialize the technology and achieve so-called “quantum advantage,” which is where quantum computers provide an actual business advantage over classical machines.

It has developed a quantum computer that relies on a technology referred to as “trapped ions,” which involves using lasers to control and stabilize the delicate “qubits” that perform quantum calculations. Its qubits take the shape of charged particles suspended in a vacuum, which implies that its machines don’t should operate at subzero temperatures like its rivals’ quantum systems do.

Qubits are what make quantum computers so powerful. Unlike traditional bits, which may only be a zero or a one, qubits generally is a one, zero or each states at the identical time, which enables them to perform vastly more complex computations.

In a note to clients, Benchmark analyst David Williams reiterated his buy rating on IonQ’s stock within the wake of the offering, increasing his price goal from $50 to $55. That got here shortly after he engaged with De Masi in a fireplace chat. The analyst noted that IonQ isn’t just a pacesetter in quantum computing, but additionally within the “critical field of quantum networking.”

Scaling quantum

Quantum networking is an adjoining industry that involves connecting multiple quantum processors as a way to pool their computing power, just like how data centers connect vast clusters of graphics processing units to power artificial intelligence workloads. In doing this, IonQ goals to beat the constraints of isolated quantum computers, which struggle to scale resulting from the instability of the qubits that power them.

De Masi has previously argued that quantum networking is the most effective option to scale quantum computing, resulting from the difficulties of adding more qubits. “If you happen to just picked a greater path, it doesn’t take a number of qubits to do useful work,” he told Barron’s in an interview in May. “We scale through quantum networking.”

Most firms have come unstuck of their efforts to create larger quantum computers. The issue is that, as more qubits are added to the system, the likelihood of errors increases beyond an appropriate limit.

IonQ’s rivals have pursued different approaches to tackling this problem, though. Within the case of IBM Corp., which is commonly said to be leading the industry, it’s working on an integrated error-correction system, and plans to launch its first fault-tolerant quantum machine before the top of the last decade.

As for IonQ, it has plans to scale up considerably through quantum networking. Its roadmap calls for it to expand from 256 physical qubits in 2026 to 2 million physical qubits and 80,000 logical qubits by 2030.

De Masi said in May that he believes IonQ is poised to grow to be “the Nvidia of quantum computing” and his comments sent the corporate’s refill by 37% in a single day. IonQ is notably considered one of the few quantum computing providers to have a stable revenue stream, which is diversified across sales of hardware, quantum computing-as-a-service and quantum applications.

In recent months, IonQ has made several acquisitions as a way to boost its technology stack and mental property, buying the quantum networking firm Qubitekk Inc. in November for an undisclosed price, after which the quantum hardware provider Oxford Ionics Ltd. for $1.075 billion last month.

IonQ can be collaborating with the U.S. Department of Defense to make use of its quantum machines to attain breakthroughs in areas like particle physics and protein folding. It’s also attempting to speed up drug discovery in a partnership with AstraZeneca Plc, Amazon Web Services Inc. and Nvidia Corp.

Still, IonQ faces a number of competition, and lots of of its quantum pure play rivals have also sold equity to fund their very own development initiatives, including Rigetti Computing Inc., Quantum Computing Inc. and D-Wave Quantum Inc. The quantity of capital flowing into the industry is a reminder that it still has an extended option to go before it becomes profitable.

Image: SiliconANGLE/Dreamina