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

The company’s new offering was priced at $55.49 per share, which is around 25% more expensive than the stock’s closing price on July 3. The sale encompasses 14,165,708 common shares plus “pre-funded warrants” for an extra 3,855,557 shares, together with seven-year warrants to acquire another 36,042,530 shares at a price of $99.88 per share.

IonQ said Heights Capital Management has agreed to buy 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 benefit from a balance sheet of approximately $1.68 billion of pro-forma cash as of March 31, 2025, underwriting our sustained growth and pioneering quantum commercialization worldwide,” commented IonQ President and Chief Executive Niccolo de Masi.

According to the company, the offering is the largest single-institution common stock investment in any quantum computing provider to date, and validates its technology, roadmap, intellectual property and talent.

Maryland-based IonQ is widely regarded as one of the leaders in the quantum computing industry. But like its peers, it has a long way to go before it can successfully commercialize the technology and achieve so-called “quantum advantage,” which is where quantum computers provide a real business advantage over classical machines.

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

Qubits are what make quantum computers so powerful. Unlike traditional bits, which can only be a zero or a one, qubits can be a one, zero or both states at the same 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 in the wake of the offering, increasing his price target from $50 to $55. That came shortly after he engaged with De Masi in a fireside chat. The analyst noted that IonQ isn’t just a leader in quantum computing, but also in the “critical field of quantum networking.”

Scaling quantum

Quantum networking is an adjacent industry that involves connecting multiple quantum processors in order to pool their computing power, similar to how data centers connect vast clusters of graphics processing units to power artificial intelligence workloads. In doing this, IonQ aims to overcome the limitations of isolated quantum computers, which struggle to scale due to the instability of the qubits that power them.

De Masi has previously argued that quantum networking is the best way to scale quantum computing, due to the difficulties of adding more qubits. “If you just picked a better path, it doesn’t take a lot of qubits to do useful work,” he told Barron’s in an interview in May. “We scale through quantum networking.”

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

IonQ’s rivals have pursued different approaches to tackling this problem, though. In the case of IBM Corp., which is often 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 end of the 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 become “the Nvidia of quantum computing” and his comments sent the company’s stock up by 37% in a single day. IonQ is notably 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 in order to boost its technology stack and intellectual property, buying the quantum networking firm Qubitekk Inc. in November for an undisclosed price, and then the quantum hardware provider Oxford Ionics Ltd. for $1.075 billion last month.

IonQ is also collaborating with the U.S. Department of Defense to use its quantum machines to achieve breakthroughs in areas like particle physics and protein folding. It’s also trying to accelerate drug discovery in a partnership with AstraZeneca Plc, Amazon Web Services Inc. and Nvidia Corp.

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

Image: SiliconANGLE/Dreamina

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