IonQ (IONQ) has teamed up with General Dynamics Information Technology (GDIT), a subsidiary of General Dynamics (GD), on “advanced quantum processing and networking applications to address high-impact use cases.”

The new partnership will enable government agencies to tap into quantum solutions to address critical challenges in executing high-priority projects. It will also help IONQ expand its footprint in the defense sector, according to the company’s press release on Tuesday. 

Shares of IONQ are still down about 4% at the time of writing. Over the past 52 weeks, shares are up more than 250%. 

Why Is IONQ Stock in the Red on Tuesday?

IONQ is seeing muted response to the GDIT announcement today perhaps because the latter talked of supply chain issues in its fourth-quarter earnings release in January. 

Such challenges, its chief executive said, were putting the company’s ability to deliver two Virginia-class attack submarines per year to test. 

If these challenges persist and continue to hurt General Dynamics’ production, it could indirectly affect IONQ as well now that it has partnered with the aerospace and defense corporation. 

IONQ investors may be concerned that these supply chain issues could disable the quantum computing specialist from realizing the full revenue potential of its partnership with General Dynamics. 

IonQ Is Used to Working with the Government

Note that IONQ is not new to working with the defense sector. Its $54.5 million agreement with the U.S. Air Force Research Lab was the government’s largest quantum computing contract in 2024.  The firm signed a $5.7 million contract with the Applied Research Laboratory for Intelligence and Security as well last year. 

IONQ stock may be attractive after a more than 20% decline since Jan. 6, considering its chief executive Peter Chapma expects quantum technology to be commercially relevant by the end of this decade. 

Investors should know that the quantum technology market is estimated to be worth $1.79 billion in 2025 and is expected to grow at a compound annualized rate of more than 31% through 2030. 

Should You Buy the Dip in IONQ stock?

Investors should remain wary of the potential challenges that could stand in the way of IONQ shares unlocking significant further upside in 2025. 

Analysts are currently cautiously bullish on the quantum computing stock with a median target of $37.60 that indicates potential downside of more than 4% from current levels. Analysts expect its earnings for 2024 to fall 10.26% year-over-year, followed by a 33.72% YOY drop in 2025. 

Meanwhile, IONQ stock remains unattractive for income investors as well since it doesn’t currently pay a dividend.