I’m always on the lookout for a growth stock that could go up a lot in my ISA, potentially making me a small fortune. With this in mind, I asked ChatGPT for a stock that might do just that.
Interested in what it said? Read on and I’ll tell you what I think about its answer…
Here’s what the bot said
The pick that ChatGPT (the free version) went for was IonQ (NYSE:IONQ).This is a quantum computing company “trying to build fault-tolerant quantum systems using trapped-ion technology“.
Now, if you’re wondering what on earth a trapped ion is, ChatGPT didn’t initially tell me. It just rattled off a load of generic information about the company and left it at that. Unfortunately, the bot has a habit of doing that.
So I prompted my AI amigo to enlighten me and it said: “Trapped ion is a method of quantum computing where individual charged atoms (ions) are held in place using electromagnetic fields and manipulated with lasers to act as qubits“.
Hmm, okay. At this point, I’m wishing I’d concentrated more in those boring physics lessons at school. What advantages does this approach have over rivals?
The chatbot summarised things like this:
- Rival superconducting qubits (used by IBM and Google) scale faster but are noisier.
- Trapped ions are slower but more accurate and stable.
So the trade-off for IonQ is fewer qubits, but potentially higher-quality ones. And this might produce more reliable quantum computation sooner, as output errors are the bane of this nascent industry.
Ionized atoms are the heart of our quantum computing systems, and as a result, we believe our computers can perform longer, more sophisticated calculations with fewer errors than any available quantum computer.
IonQ.
Digging in further
Digging deeper, I see a couple of things that I like here.
First, the company is growing at a torrid pace. In Q1, revenue skyrocketed 755% to $64.7m, driven by surging global system sales, increasing cloud utilisation of its technology, and strong demand for Tempo (its next-generation quantum computer).
This was much higher than analysts expected, enabling management to raise 2026 guidance to $260m–$270m (up from $225m–$245m). The backlog grew to $470m, up 554% year on year.
Another thing I like is that IonQ operates a cloud-based quantum computing platform, giving customers remote access to its systems via cloud platforms. So sales come from both cloud access and physical systems hardware.
Would I buy this stock?
Looking ahead, Wall Street expects revenue to hit at least $638m in 2028. However, this is where things get a little bit less appealing.
You see, IonQ stock is up 481% in three years, giving it a sizeable $21.5bn market cap. And this puts IonQ on a sky-high price-to-sales ratio of 98 (something ChatGPT failed to warn me about).
In other words, the market’s already pricing in aggressive multi-year growth, and this makes it less appealing to me.
Finally, IonQ is years off reaching profitability, according to forecasts. So, while this is an exciting name, it’s far too risky for my liking. I prefer to invest elsewhere today.
Should you invest £5,000 in IonQ right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if IonQ made the list?
Ben McPoland has no position in any of the companies mentioned.
