Stock-Split Watch: Is IonQ Next?

Core Viewpoint - The article discusses the potential for IonQ, a quantum computing company, to execute a stock split in 2025, following significant stock price increases and recent stock splits by other tech companies in 2024 [1][2]. Group 1: IonQ's Stock Performance - IonQ's stock has surged over 520% in the past three years, making it a candidate of interest for potential stock splits [1]. - The company reported revenue growth from $1.4 million in 2021 to $43.1 million in 2024, projecting continued growth into 2025, which would represent a compound annual growth rate of 170% from 2021 to 2025 [5]. - IonQ's gross profit increased from $1.1 million in 2021 to $22.5 million in 2024, with an average gross profit margin of 59.9% during this period [6]. Group 2: Stock Split Considerations - Investors often seek to identify potential stock splits, believing that owning more shares post-split will enhance their financial position, although this logic is flawed [7][8]. - Companies typically split their stocks when share prices become prohibitively high for new investors; IonQ's shares have traded around $35, making a stock split less likely [9]. - Comparatively, other companies like Palo Alto Networks and Super Micro Computer executed stock splits when their shares were trading near $400, indicating that IonQ's current price does not necessitate a split [10]. Group 3: Investment Outlook - With the likelihood of a stock split diminished, investors may question whether it is a good time to invest in IonQ, especially as the company has not yet achieved positive net income [11]. - IonQ's shares have declined approximately 16% year-to-date, suggesting a potentially better buying opportunity compared to the beginning of the year [11].