Up 69% This Week, Is IonQ Stock Overvalued?

IonQ (IONQ) stock has been on fire this week, surging 34% on Thursday after earnings and extending its gains by about 14% this afternoon as we head into the weekend. IONQ is now up 69.7% since last Friday's close and, at around $25 per share, is trading well above Wall Street’s highest price target of $18. 

The quantum computing company surged following its third-quarter results, which exceeded sales expectations despite a higher-than-anticipated loss. IonQ's revenue increased by 103% year-over-year, and it secured a significant contract with the U.S. Air Force Research Lab, underscoring its growing influence in quantum networking. 

IonQ's strategic acquisition of Qubitekk and partnerships with firms like Ansys (ANSS) and NKT Photonics have also bolstered investor confidence. Despite these promising developments, and management’s newly increased revenue guidance, the stock remains a high-risk investment due to its speculative nature. The uncertainties inherent in the quantum computing sector contribute to this risk. 

Valued at a steep forward price/sales ratio of 113.88, and with a 14-day Relative Strength Index (RSI) of 83 - well into overbought territory - IONQ stock may well have significant long-term growth potential, but it’s easy to make a case for the stock being expensive at current levels, and even due for a potential short-term pullback. 

Overall, IonQ presents a high-reward opportunity, but investing around these prices requires cautious consideration from investors.