Ion Q (NYSE: IONIC) Stocks posted another day of huge gains in Thursday trading. The quantum computing company’s share price ended the daily session up 13.5% and had risen as much as 17% earlier in the day.
IonQ’s big gains today are tied to Nvidia‘s (Nasdaq: NVDA) The most recent third-quarter earnings report, which saw artificial intelligence (Amnesty International) Post leader in sales, earnings and future guidance that beats Wall Street expectations. Despite falling early in today’s trading, Nvidia stock ended the day’s trading 0.5% higher — and its strong quarterly performance and share price gains helped fuel momentum for other growth stocks.
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Nvidia has been the hottest and most influential mega-cap growth stock this year. The company has increasingly become central to overall stock market momentum, and its performance often has a significant impact on growth-based stock valuations. Q3 AI outperformance and encouraging forward guidance helped support bullish momentum for growth and speculative technology stocks today.
In the third quarter, Nvidia published Non-GAAP (Adjusted) earnings per share of $0.81 on revenue of $35.08 billion. For reference, the average analyst estimate called for the company to report adjusted earnings of $0.75 on sales of $33.16 billion. Nvidia’s guidance for revenue of $37.5 billion in the fourth quarter of its current fiscal year also beat Wall Street’s average estimate for sales of $37.08 billion in the period.
Nvidia stock initially fell after its third-quarter release because some investors were looking for better performance, but its quarterly report and forward guidance had immediate beneficial valuation implications for many other technology stocks. IonQ stock rose earlier in the week after the company announced it had successfully completed a demonstration of its technology in combination with Nvidia’s CUDA-Q software platform for hybrid quantum computing, and the quant stock enjoyed another rise in conjunction with Nvidia’s strong quarterly results.
After today’s gains, IonQ stock is up 164% during 2024 trading. The company’s market cap now stands at about $7.1 billion and is valued at about 170.5 times this year’s expected sales.
As a company with a core business of delivering disruptive technologies, it doesn’t make sense to put too much weight behind traditional evaluation metrics. On the other hand, IonQ’s assessment highlights the possibility that the long-term performance of the quantitative specialist’s stock will have a somewhat binary outcome.
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