IonQ, one of the best-known publicly traded quantum computing companies, is facing a raft of questions about the quality of its revenues and insider stock sales following a report published today by short-seller Wolfpack Research.
Wolfpack, which is short IonQ’s stock and thus stands to gain financially from its allegations, said that the company has consistently misled investors about the extent to which there is organic demand for its quantum computing technology.
In particular, the Wolfpack report said the company did not disclose to investors the extent to which its reported revenues had been dependent on “backdoor earmarks” inserted into the Pentagon budget by friendly lawmakers—and that those earmarks were canceled after the Republicans took control of Congress in 2025.
After Fortune’s deadline to publish, IonQ provided this statement: “[The Wolfpack Research report] contains false, misleading, and unsubstantiated claims from a short-seller that is attempting to profit by driving down the price of IonQ shares. The report has substantial misrepresentations as to IonQ’s government relationships, business strategy, and financial sustainability. IonQ is continuing to advance our position as the world’s leading quantum company. We have a clear path to shareholder value creation, and our recent agreement to acquire SkyWater Technology is evidence that IonQ is a trusted ecosystem partner to the U.S. government, allied nations, and industry collaborators.”
IonQ was worth more than $13.8 billion before the start of trading Wednesday. Following publication of the Wolfpack research, its shares dropped more than 11% before recovering slightly. As of market close Wednesday, they were down about 8%.
The short-seller’s research raises questions about one of the most prominent companies in a highly hyped sector. While a number of Big Tech companies, including Google, Microsoft, and IBM, have made significant scientific breakthroughs in quantum computing over the past few years, the technology is only in the earliest stages of commercial adoption.
A handful of companies have done pilot projects showing that it is possible to use a quantum computer to speed up how long it takes to make complex calculations, such as optimizing delivery routes or calculating the risk profile of a large financial portfolio. But few of these use cases have yet progressed beyond the pilot phase. There are several fundamentally different ways of building quantum computers, and there remains active debate among scientists about which technologies will ultimately prove commercially viable.
IonQ admitted these challenges last November in its most recent quarterly report, where it warned: “We have not produced a scalable quantum computer and face significant barriers in our attempts to produce quantum computers. If we cannot successfully overcome those barriers, our business will be negatively impacted and could fail.”
Such obstacles have not stopped a few quantum startups from selling shares on the public markets, often through reverse mergers with blank-check “special purpose acquisition companies” or SPACs. IonQ did its own SPAC deal in the autumn of 2021; since then its share price has more than tripled.
In a conversation with Fortune on Jan. 28—prior to the release of the Wolfpack report—CEO Niccolo de Masi insisted that IonQ was in fact already selling quantum machinery to commercial partners.
He cited a partnership last year with Nvidia and Amazon Web Services to provide hybrid quantum-classical computing services to AstraZeneca that would make “computational drug design” 20-fold faster than before. “It’s turning a month of computational work into a day and a half, and that was using hardware from 2024,” de Masi said.
Speaking a few days after completing IonQ’s $1.8 billion acquisition of SkyWater, a computer chip foundry, de Masi also poured scorn on rival quantum companies, whom he believes do not have viable products. “There are large companies in the quantum computing space who say that they’re in the race—and they’re roughly where we were in 2001! But they will still talk to journalists and say they’re in the race. And you’re like, ‘You’re in the race the way Graphcore is in the race with Nvidia,’” he said. (Graphcore is a U.K. AI chip startup that struggled to gain market share and was acquired by SoftBank in 2024.)
“If your machine hasn’t turned on, and you have no revenue, I think [your stock] needs to be discounted heavily,” de Masi told Fortune.
Research grants vs. commercial revenue
However, the Wolfpack report states that IonQ has failed to disclose that up to 86% of its reported revenues from the years 2022 to 2024 came not from commercial customers but from Pentagon research grants that the Pentagon itself never asked for, and that have since been eliminated. The funding instead came, Wolfpack says, from so-called backdoor earmarks slipped into the Pentagon budget by friendly congressional representatives. IonQ may have inflated both the amount and the nature of this revenue, according to the Wolfpack report.
For instance, in September 2024, IonQ announced that it had won a $54.5 million contract with the U.S. Air Force Research Laboratory, calling it “the largest 2024 U.S. quantum contract award,” and implying that the contract was validation of what it called its “mature—and commercially focused—technology road map.”
What the company did not say is that the Air Force Research Laboratory had awarded these contracts not because the Air Force was inherently interested in IonQ’s trapped-ion quantum computing technology, but because individual members of Congress added lines to the federal budget compelling the lab to spend the money on “trapped-ion quantum computing,” Wolfpack alleges.
The company also never made clear to investors that of the $54.5 million amount, only $12 million was actually funded in the budget. The larger number represented the total possible future awards under the contract, but the Air Force laboratory had no contractual obligation to spend this amount. Despite this, Wolfpack claims IonQ included the entire number in the “bookings,” or future booked revenue, metric it provided to investors.
After Republicans won the 2024 congressional elections, they moved to eliminate backdoor earmarks Democrats had inserted into the budget. IonQ wound up losing its original earmarks in both the fiscal year 2025 and FY 2026 budgets. Wolfpack estimates that of the $75.6 million in Pentagon contracts IonQ said it had booked in 2024, only $21 million was fully funded. The remaining $54.6 million, or 58% of IonQ’s total reported bookings, were unfunded portions of federal contracts awarded through backdoor earmarks.
“Whatever somebody wants to point to as far as what our financial benefit is, we’re providing transparency, and government earmarks do not,” Wolfpack founder and CEO Dan David said.
Rather than disclose the effect that a change in congressional leadership might have on its bookings, IonQ continued to include the figure in its full-year 2024 financial results, announced on Feb. 26, 2025. That same day, IonQ’s CEO at the time, Peter Chapman, stepped down. De Masi, who had been CEO of the SPAC that IonQ used to go public and who had served on IonQ’s board ever since, took over the role. He told investors weeks later that the company would stop reporting bookings going forward. According to the Wolfpack research, de Masi implied in response to a question from an analyst at a Morgan Stanley conference in early March that this was because IonQ’s technology was getting so much commercial traction, the bookings figure was no longer useful to investors.
The short-seller also suggests that IonQ managers, including current CEO de Masi and former CEO Chapman, sold almost $400 million worth of the company’s shares after having been tipped off that the federal earmarks underpinning the company’s revenues had been eliminated—but before the publication of funding tables that would have enabled members of the public to notice their cancellation. Wolfpack alleged it is up to government investigators to determine whether this might constitute insider trading, but that at the very least, the large stock sale suggests management lacked confidence in the company’s prospects.
David, the Wolfpack CEO, said: “We’re not making an accusation, but we are pointing out some really ugly facts around losing those earmarks, who knew when, and the creation of 10b5-1 plans.” A 10b5-1 is a plan an executive files with the SEC that allows them to make sales of stock on a set schedule without violating insider trading laws. But executives need to certify that they are not in possession of material nonpublic information when they set up such plans. De Masi and other executives set up new 10b5-1 plans in the period after IonQ’s earmarks were excised from the federal budget but before that information showed up in public databases.
Acquiring revenue
The Wolfpack report says that rather than disclose that the earmarks have been eliminated, IonQ has engaged in a series of acquisitions in which it has purchased additional revenue, sometimes by acquiring companies with technology that is not directly related to its core trapped-ion quantum computing systems.
David said that because IonQ does not make clear what portion of revenues are related to its core quantum computing business and which are coming from acquisitions, it is impossible to determine how much organic growth its quantum computing business is experiencing.
For instance, IonQ bought Capella Space, a company that operates satellites and sells satellite imagery, in July 2025 for $425 million. Of that, $50 million was paid in cash and the rest was IonQ shares. Wolfpack alleges that IonQ bought the company primarily because it generates $11 million in quarterly revenue and because Capella’s main customer is the U.S. government, allowing IonQ to continue to report growing Pentagon revenues in ways that might mislead investors into thinking this money represented continued Pentagon interest in IonQ’s quantum computing tech.
IonQ also bought Vector Atomic, a company that makes atomic clocks. Vector too has sizable government contracts, which Wolfpack’s report says could generate as much as $88 million in revenue in 2026. But the report points out that atomic clocks are not a cutting-edge technology and are not directly related to IonQ’s trapped-ion quantum computers.
The company also purchased a controlling stake in Swiss quantum key distribution (QKD) company ID Quantique for $116 million. That company generates about $6 million per quarter. But both the U.S. National Security Agency and the U.K.’s GCHQ signals intelligence agency have cautioned against using QKD because it is a cumbersome and expensive way to protect data from attacks by future, powerful quantum computers and because it is potentially susceptible to interception methods. So the potential for revenue growth may be limited.
SkyWater, IonQ’s most recent purchase, also has substantial government contracts. But Wolfpack said that the company, which made $3.1 million last year on revenues of $346.6 million, “appears to be another business that relies on backdoor earmarks for funding, supplementing its razor-thin margins with government grants.”
De Masi told Fortune on Jan. 28 that IonQ’s acquisitions are part of a strategy to become a vertically integrated quantum company, controlling everything from the computer chip factories that could one day make chips for its quantum computers to quantum networking equipment.
“If they want to be vertically integrated, they should stop going sideways with their acquisitions,” David told Fortune. “These acquisitions, in my view, are not vertically integrated. They are tangential, if not sideways. Just because something has atomic in the name does not make it a quantum computing company.”
As a result of its flurry of acquisitions, IonQ reported that its revenues increased 222% to $39.9 million in its most recent quarter, and gave guidance that it would achieve triple-digit-millions in annual revenue in the next year. That’s more than twice the revenue of all other publicly traded quantum companies combined. IonQ also reported a net loss of $1 billion in the same period, Q3 2025. But the company is well-capitalized: It has $3.5 billion in cash and equivalents on hand, after taking $4.4 billion in investments over its history, de Masi told Fortune.
IonQ has long been the target of short-sellers. It was attacked in 2022 by Scorpion Capital, which alleged the company’s technology was “a hoax.” That led to a shareholder derivative suit which was ultimately dismissed by the U.S. Court of Appeals for the Fourth Circuit, which ruled that the Scorpion report was not reliable. At the time, IonQ dismissed Scorpion’s research as “riddled with disinformation.”
Then, in March 2025, Kerrisdale Capital published a short report calling the company “hype.” “We believe IonQ is far from being on the verge of a new era of commercial success with its limited, error-prone systems. Instead, investors seduced by IonQ’s claimed ‘history of delivering on technical and commercial milestones’ are fixated on relatively immaterial past achievements, while ignoring the existential challenge all early-stage computing companies face: scalability.”
Immediately prior to the Wolfpack report, about 21% of IonQ’s stock was held by short investors. For comparison, the average for most stocks is 3% to 5% in short interest.
Editor’s note: Parts of this article, including its title and photo caption, were updated to reflect IonQ’s response to Fortune‘s queries, which was received after the article’s publication deadline.
