Key Points
IonQ's upcoming new product launch could create major business opportunities for it.
IonQ would have to become a trillion-dollar company to be a millionaire-maker stock.
IonQ (NYSE: IONQ) is one of the most popular quantum computing pure plays for a reason. It has incredible technology, and its latest quantum computer model will launch early next year. This could kick-start more interest in quantum computing if it's successful, and a handful of preorders are already lined up.
This bodes well for the stock, but how much upside does it have? Could it make you a millionaire? Let's check the math.
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IonQ could deliver huge growth
For any stock to be called a millionaire maker, I think its return threshold should be set at 100x, meaning it could transform a $10,000 investment into $1 million. That's a high bar to clear, but the quantum computing revolution could be huge.
There are at least nine different technological approaches to make the qubits that sit at the heart of a quantum computer, the most common of which involves using superconducting circuits.
That's not the one IonQ is pursuing. Instead, it's using trapped ion qubits; each one is made from a single charged atom, held in place by electromagnetic fields. This technology offers better accuracy than superconducting qubits, but it's slower. However, given that insufficient accuracy is one of the major problems with quantum computing, this approach makes sense. IonQ currently holds the world record for the most accurate quantum computing technology, and it is building its innovative 256-qubit system around it. IonQ is expected to launch that system in early 2027, and it could be a decent revenue driver, further inching the company toward becoming a self-sustaining business.
By 2035, McKinsey & Company estimates that the quantum computing industry could grow to be worth up to $72 billion annually.
Let's assume the market reaches that lofty projection in 2035 and make the further assumption that IonQ captures 100% of it. If it grows to deliver an impressive 50% profit margin (in line with the margins being delivered by Nvidia, the current king of computing units), that would result in $36 billion in annual profits. If we apply an earnings multiple of 30 to that figure, we get a $1.08 trillion company.
Currently, IonQ has a market cap of about $11.7 billion. So if all the assumptions in that ambitious projection come true, that would mean just over a 90x return.
So even under that highly optimistic bull case, I don't think IonQ has what it takes to deliver a 100x return within a decade. However, I still think it could generate market-beating returns if its quantum computing technology pans out, and over the long term, that could help you build a million-dollar portfolio.
Keithen Drury has positions in IonQ and Nvidia. The Motley Fool has positions in and recommends IonQ and Nvidia. The Motley Fool has a disclosure policy.