Key Points
The U.S. government plans to award $2 billion in quantum computing grants.
It will take equity stakes in grant recipients.
It will give no money, nor take a stake in IonQ.
Valued at $19.6 billion, IonQ (NYSE: IONQ) stock is the biggest pure play on quantum computing you can buy. That's the good news for IonQ today. The bad news is that... the United States government is not buying IonQ stock -- but it's buying shares in just about everybody but IonQ.
This is the news that's moving IonQ stock up 9.5% through 10:35 a.m. ET Thursday morning:
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According to an exclusive report in today's The Wall Street Journal, the Trump Administration will award $2 billion in grants to nine quantum computing companies and take equity stakes to secure its investment in each.
Image source: Getty Images.
Money for thee, but not for me
IonQ is not one of these companies, but its smaller publicly traded rivals D-Wave Quantum(NYSE: QBTS), Infleqtion(NYSE: INFQ), and Rigetti Computing(NASDAQ: RGTI) are all receiving grants and investments. So too is that old dinosaur of computing, International Business Machines(NYSE: IBM) -- which indeed is getting half the funds on offer, a nice, round $1 billion.
D-Wave, Infleqtion, and Rigetti will each receive $100 million. Globalfoundries(NASDAQ: GFS) will get $375 million, and the rest will be parceled out among a handful of privately owned companies -- including one part-owned by Donald Trump Jr's 1789 Capital!
But again, no money for IonQ.
What does this mean for IonQ stock?
So how is any of this good news for IonQ, if it's getting no money, and everyone else is getting a lot of money -- plus backing from the U.S. government that will give it an interest in seeing IonQ's rivals succeed (and perhaps that IonQ fails)?
I honestly don't get the logic behind investors buying IonQ on this news. With analysts still expecting the stock to lose money for years, it may be time to sell.
Should you buy stock in IonQ right now?
Before you buy stock in IonQ, consider this:
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GlobalFoundries, International Business Machines, and IonQ. The Motley Fool has a disclosure policy.
