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IonQ (IONQ) shares fell 2.5% last week, but a rally on Friday was welcome relief to shareholders that have been battered by selling since mid-October.
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IonQ’s $1.8B acquisition of SkyWater Technology (SKYT) in late January hasn’t stemmed losses as shares have declined 27% since.
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Wall Street remains bullish on the company, but expectations to deliver revenue growth are growing as the market sours on momentum stocks.
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IonQ Inc (NYSE:IONQ) dropped 2.5% this week, underperforming both the SPDR S&P 500 ETF Trust (NYSEARCA:SPY)’s 1.3% decline and the Invesco QQQ Trust (NASDAQ:QQQ)’s 1.3% drop. The bad news? Shares were down. The good news? Friday saw a welcome relief rally of 9%.
Shares opened the day largely flat, but rallied into noon. IonQ shares are still down signficantly from their 52-week highs, but the company is outperforming many of its quantum peers despite the drop.
Three distinct storylines collided this week: a controversial short-seller attack, a massive acquisition that spooked investors, and a widening gap between analyst optimism and market reality.
IonQ closed at $34.11 on Friday, extending year-to-date losses to 24%.
The stock now trades 33% below where it started 2026, a sharp reversal from its five-year run that’s still up 189%. The weakness accelerated through February, with shares down 33% over the past month. That volatility aligns with IonQ’s beta of 2.6, meaning the stock moves more than twice as much as the broader market.
Overall, the market’s monetum sell-off that began in mid-October has continued into 2026. It’s a tough environment for companies selling at high price to sales multiples and will demand more tangible results across the next two years if IONQ is going to break out of the negative sentiment surrounding the stock today.
On February 6, Wolfpack Research released a report questioning IonQ’s revenue methodology and dependency on U.S. defense funding. The stock dropped approximately 11% following the release.
The report alleged the company lost funding for key Pentagon contracts and improperly reported bookings. Within hours, law firm Ademi LLP announced a securities fraud investigation focusing on whether revenues were inflated by federal government backdoor earmarks and whether executives’ nearly $400 million in stock sales constituted insider trading.
Short interest tells the story of growing skepticism. 78.18 million shares are now sold short, representing 22.77% of tradable shares, up 10.32% since the last report. IonQ denied the claims, but investors will get clarity when the company reports Q4 and full-year 2025 results on February 25, 2026.
On January 26, IonQ announced it would acquire semiconductor foundry SkyWater Technology Inc (NASDAQ:SKYT) for $1.8 billion in cash and stock.
The goal: create a vertically integrated quantum platform consolidating hardware, networking, sensing, and security under one roof. The market’s response? Shares are down 28% from the closing price before the acquisition was announced.
Investors worried about cash burn, dilution, and execution risk despite management’s vision of building a full-stack U.S.-based quantum powerhouse.
The acquisition follows deals for Seed Innovations and Skyloom Global Corp, signaling an aggressive M&A strategy. But with the stock trading at 57.3x forward sales versus an industry average of 4.9x, investors are questioning whether IonQ can defend its revenue base while integrating multiple acquisitions.
Wall Street remains bullish despite the selloff. Analysts maintain a consensus Moderate Buy rating with an average price target of $75.91, implying 127% upside. Cantor Fitzgerald reiterated its Overweight rating with a $70 target on February 9, while Rosenblatt Securities holds the Street-high $100 target.
The disconnect is stark, but stocks that re-rate lower often have price targets significantly above where they’re trading.
IonQ trades at 141x sales while burning $408 million in EBITDA annually. The company projects $106 to $110 million in full-year 2025 revenue, representing 113% year-over-year growth.
But with the February 25 earnings call looming, investors need to see execution, not just projections, to bridge the gap between analyst targets and market reality. Wall Street expects sales to grow to $192 million in 2026 and $316 milllion in 2027. With the market becoming more skeptical of quantum stocks, hitting these targets becomes more important for shares to reverse current negative sentiment.
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