IonQ (IONQ) continues to beat quarterly revenue guidance, with momentum remaining strong and the company's 256-qubit milestone still on track, Morgan Stanley said in a Thursday note.

IonQ beat revenue guidance for the fourth straight quarter, including a 31% beat in Q1, the firm said.

Morgan Stanley said the company has not been specific about the drivers of outperformance, but trends point to strong ongoing momentum.

Analysts also noted that one-third of the company's revenue came from customers who have bought more than one product, pointing to cross-selling synergies.

Morgan Stanley said 256-qubit system developments are moving through later-stage systems testing and should be ready for demonstrations by year-end, with delivery expected in H1 2027.

The firm raised its 2026 revenue estimate to $265 million from $235 million and its 2027 estimate to $401 million from $380 million.

Morgan Stanley has an equal-weight rating on IonQ and raised its price target to $48.50 from $47.

Shares of IonQ were down more than 4% in Thursday trading.

Price: 50.33, Change: -2.25, Percent Change: -4.27