IonQ vs. Microsoft: Which Stock Has More Quantum Upside in October?
Quantum stocks are struggling even as companies continue to make progress in the technology. That tension is particularly visible in IonQ IONQ, a pure-play quantum company, whose shares have struggled even as the company accelerated its technology roadmap. In September alone, IonQ launched its Superion 256 platform, raised its 2026 revenue outlook to $450-$460 million, demonstrated real-time quantum error decoding and announced that Superion 256 will be deployed at NVIDIA’s NVDA Accelerated Quantum Research Center.
Microsoft MSFT, meanwhile, is expanding its quantum-computing business while pursuing a fundamentally different approach. Its Majorana 2 program targets scalable topological quantum computing, with Microsoft aiming for a practical quantum machine by 2029. The opening of its Maryland quantum research center and the provision of Majorana 2 hardware for DARPA’s independent testing add a fresh validation milestone to that roadmap.
Over the past three months, IonQ shares have declined 16.3%, highlighting the disconnect between the company’s quantum progress and investor sentiment. Microsoft shares, in contrast, have gained 36.5% over the same three-month period.
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Against this backdrop, the key question is whether IonQ’s accelerating quantum progress can translate into a stronger stock performance in October, or whether Microsoft’s broader business and growing quantum capabilities will provide investors with a different way to participate in the opportunity.
Let’s find out.
IonQ: Strong Quantum Progress, But Profitability Remains Distant
IonQ reported $80.1 million in second-quarter 2026 revenues, up 287% year over year, driven by quantum-computer deployments, cloud usage and broader commercial activity. It subsequently raised its full-year 2026 revenue outlook to $450-$460 million, including the contribution from its SkyWater acquisition.
IonQ is also investing to scale quantum manufacturing. The company launched its Superion 256 platform in September, began accepting orders and expects the first customer deliveries in 2027. IonQ says its vertically integrated manufacturing strategy is designed to accelerate its roadmap toward large-scale, fault-tolerant quantum computing.
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The challenge is profitability. IonQ posted a $1.87 billion GAAP net loss in the second quarter, while adjusted EBITDA was negative $120.3 million. For the first six months, operating activities consumed cash, although IonQ ended June with $3.0 billion in cash, cash equivalents and investments, or about $2.0 billion after accounting for cash used for the SkyWater acquisition.
Thus, the near-term investment case rests more on technology milestones, bookings and revenue growth than on quantum profitability.
Microsoft: Quantum Upside Backed by an Established Cash Engine
Microsoft’s Majorana 2 program aims to build a scalable quantum computer, with Microsoft targeting a system by 2029. In September, it began providing Majorana 2 technology to DARPA for on-site testing at its new Maryland quantum research center.
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Crucially, Microsoft can fund this long-term quantum effort from an already highly profitable business. In fiscal 2026, Microsoft generated $55.4 billion of operating cash flow in the fourth quarter and ended the year with $20.9 billion in cash and cash equivalents. Its fiscal 2026 capital expenditures totaled about $115.9 billion, largely directed toward the broader cloud and AI infrastructure buildout rather than quantum specifically.
That financial strength changes the quantum equation. Microsoft can continue funding a potentially lengthy quantum R&D cycle without relying on quantum revenues to cover the investment. For investors, therefore, MSFT provides quantum upside embedded within an established, cash-generating business, rather than a standalone bet on quantum commercialization.
Valuation: IonQ Trades at a Steep Premium
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IonQ’s F12M price-to-sales multiple stands at 23.19X, well above the 5.20X multiple for the Computer-Integrated Systems industry. However, the stock trades below its historical median of 61.96X, indicating that its valuation has contracted significantly from past levels.
Microsoft trades at 9.29X F12M sales, compared with 6.13X for the Computer-Software industry and its historical median of 10.75X. While MSFT also commands a premium to its industry, its current multiple is closer to its historical norm.
The valuation gap remains significant. IonQ’s premium reflects the high growth expectations embedded in its quantum-computing opportunity, despite the company’s ongoing losses and cash requirements. Microsoft, meanwhile, combines quantum exposure with diversified revenue streams, substantial cash generation and a valuation closer to its historical range.
Our Take: Microsoft Offers the Better Quantum Exposure for October
Microsoft appears better positioned for October, offering investors a more balanced way to participate in the long-term quantum opportunity. While IonQ provides more direct quantum exposure and has made notable progress on its technology and revenue roadmap, it remains loss-making and trades at a much higher sales multiple. Microsoft, in contrast, can fund its ambitious quantum program with substantial cash generation from its established businesses, while its valuation is closer to its historical range.
The Zacks Rank also provides a point of differentiation, with MSFT carrying a Zacks Rank #3 (Hold) versus a Zacks Rank #4 (Sell) for IONQ. Although IonQ could offer greater sensitivity to a breakthrough in quantum commercialization, Microsoft’s financial strength, diversified business and growing quantum capabilities make it the more balanced choice for investors heading into October.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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See Top Quantum Stocks Now >>Microsoft Corporation (MSFT) : Free Stock Analysis Report
IonQ, Inc. (IONQ) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
