IonQ (NYSE: IONQ), a quantum computing company, just made a huge leap forward by figuring out how to mass-produce high-quality synthetic diamond films. Think of it like this: they can now bond these special diamonds onto regular computer chips, which is a game-changer for building quantum computers and the quantum internet.

This breakthrough, which they developed with Element Six, means the company can finally start making these components at scale. It’s a key part of IonQ’s plan to hit its goal of building a 2-million-qubit quantum system by 2030. In fact, IonQ’s acquisition of the UK quantum computing startup Oxford Ionics a few months ago was a key move to accelerate this very goal.

So, with this development, the big question is: can it fuel even more explosive growth for IonQ’s stock? The stock has already seen an incredible 500% increase in the last year, but can it grow another 10x from here, reaching levels of $400 a share? It can. In the following sections, we’ll explore what could make that happen.

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Image by Pete Linforth from Pixabay

10x Growth Drivers

  1. Superior Technical Architecture: IonQ’s trapped-ion approach operates at room temperature with naturally high fidelity, unlike superconducting systems requiring extreme cooling.
  2. Strategic Cloud Partnerships: Rather than competing with tech giants, IonQ enables them through partnerships with Amazon AWS, Microsoft Azure, and Google Cloud. This symbiotic approach accelerates enterprise adoption through trusted platforms, similar to Snowflake’s successful cloud data strategy. Notably, this approach is also followed by other quantum companies, such as Rigetti, IBM, and Honeywell’s Quantinuum.
  3. Government Validation: Significant contracts with the U.S. Air Force Research Laboratory and other agencies provide a stable revenue base while validating technology for mission-critical applications. Government adoption signals serious technological credibility.
  4. Market Timing Advantage: Quantum computing is approaching its commercial inflection point, with McKinsey estimating close to $100 billion market by 2035. IonQ’s positioning across optimization, machine learning, and cryptography maximizes addressable opportunity.

Risk Factors

  1. Technical Scaling Challenges: Despite architectural advantages, IonQ must solve complex engineering problems to reach thousands of qubits while maintaining performance leadership against advancing competitors like Google’s Willow chip.
  2. Revenue Concentration: Heavy dependence on cloud partnerships and government contracts creates vulnerability to partnership changes or funding shifts. Direct enterprise sales diversification remains challenging but necessary.
  3. Competitive Pressure: Well-funded rivals including IBM, Google, and emerging startups like Atom Computing aggressively pursue market share with alternative approaches that could disrupt IonQ’s advantages.
  4. Commercial Timeline Uncertainty: Success depends on quantum applications reaching commercial viability faster than cash burn rates—a challenging balance in emerging technology markets. IonQ’s operating cash flow of -$144 million in the last twelve months implies a -275% operating cash flow margin.

Historical Precedents

  1. Tesla’s Transformation (2019-2021): Tesla’s rise from $17 to over $400 demonstrates how market leadership in transformative technology drives explosive returns. IonQ could similarly lead quantum computing’s revolution.
  2. AWS Precedent: Amazon’s transformation of internal infrastructure into an $80+ billion revenue business shows how cloud-based technology services can create massive value as markets mature.
  3. NVIDIA’s AI Revolution: NVIDIA serves as the most pertinent comparison for IonQ’s potential growth trajectory. Since 2016, NVIDIA stock surged from around $3 to more than $170 (adjusted for splits), marking a 68x increase. This expansion occurred as NVIDIA evolved from a gaming graphics firm to a core component of AI infrastructure. Similarly, IonQ may capitalize on the burgeoning quantum computing infrastructure market.
  4. Biotech Breakthroughs: Moderna’s development of a COVID-19 vaccine propelled its stock from $20 to over $400 in 2020-2021, illustrating how groundbreaking applications can lead to explosive growth. Quantum optimization solutions could similarly disrupt industries once they gain commercial traction.

The Bottom Line

IonQ is a high-risk, high-reward stock that could be a huge winner. The company’s trapped-ion technology and cloud-first strategy could give it an edge over competitors. For the company to succeed, it needs to keep its technical lead, turn its research into real-world applications, and make its partnerships pay off. If you’re an investor who’s comfortable with risk, IonQ offers a chance to invest directly in the future of quantum computing.

However, note that significant risks remain in this emerging technology investment. Instead, you could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

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