Domestic individual investors, known as 'Seohak Gaemi,' who invest in U.S. stocks, are showing keen interest in quantum computers. Even though it is listed on the New York Stock Exchange, a specific corporation holds one-third of the total shares, which are owned by Koreans. Following artificial intelligence (AI), quantum computers are being highlighted as a theme that will deliver exceptional returns, but there are concerns in the securities industry that the enthusiasm may be excessive.
According to the Korea Securities Depository on the 23rd, domestic investors hold shares of IonQ worth $2.545 billion (approximately 3.6919 trillion won), which accounts for 31.15% of IonQ's market capitalization. The value held by domestic investors in IonQ exceeds that of Alphabet, which has a market capitalization about 250 times larger at $2.48896 billion. IonQ is valued at $8.17 billion (approximately 11.7458 trillion won), comparable to Doosan Enerbility and Ecopro in South Korea.
One reason investors are paying significant attention to IonQ, despite its size, is the scalability of quantum computers. A quantum computer processes problems using quantum mechanics, offering ultra-fast computations compared to traditional computers, making it exceptionally compelling. In fact, this month, Google announced research indicating that it completed a problem that would take 10 zettayears (10^24 years) using its quantum computer in just five minutes.
Due to these characteristics, there are projections that quantum computers will revolutionize tasks requiring large-scale calculations or numerous simulations aimed at finding optimal solutions. Im Ji-yong, a researcher at NH Investment & Securities, noted, "Google's announcement regarding its quantum computer represented significant progress toward commercialization." It is anticipated that quantum computers could be game changers across various industries, including AI, pharmaceuticals, aerospace, and finance.
IonQ is considered to have relatively high potential for stock price increases among quantum computer-related stocks. This is because, in the stock market, when a specific theme surges, the stock price increases of smaller companies like IonQ are typically more explosive compared to larger corporations such as Google.
Another advantage is that it differs from other startups that fail to generate revenue. IonQ has signed a contract worth $54.5 million with the U.S. Air Force Research Laboratory (AFRL), regarded as the largest contract in the quantum computing industry this year.
However, IonQ also carries the chronic limitation of being in the 'deficit' typical of startups. Since its listing in 2021, it has not posted a single year of profit. The net loss in its first year was $101.9 million (approximately 154 billion won), which increased to $157.77 million (approximately 228.8 billion won) last year. Mirae Asset Securities predicts that IonQ's deficit will widen to $199 million (approximately 288.6 billion won) next year.
The fact that the stock price has risen significantly in a short period due to the influx of domestic investors is also a concern. From the beginning of the year until October, the stock price fluctuated around $10 but started to accelerate from last month, finishing at $37.76 on the 19th (local time). This reflects an increase of over 180% in just one year.
Even just looking at the indicators, it is in an overvalued state. Because it is operating at a loss, metrics like return on equity (ROE) and price-to-earnings ratio (PER) are not very meaningful. However, the price-to-book ratio (PBR) is 16.75 times, significantly higher than the S&P 500 average of 5.56 times.
According to Korea Investment & Securities, the U.S. investment bank Needham has set IonQ's target stock price significantly lower at $18. Craig Hallum's target price is also lower at $22.
One of the challenges of quantum computers themselves is that their implementation is complicated and expensive. Qubits, the fundamental units of computation in quantum computers that can simultaneously represent 0 and 1, are sensitive to external environments. Qubits must allow current to flow without resistance, which is only possible in ultra-low temperatures (minus 273°C). A cryogenic cooling system must be maintained to use quantum computers without errors, and it is reported that each unit costs tens of billions of won.