Prediction: IonQ Could 10x by 2035

IonQ (NYSE: IONQ) is one of the biggest names in quantum computing, but it's not a very large company. It has a $12 billion market cap, so if it rises by a multiple of 10 in a tick under a decade, it would only be a $120 billion company, which is pretty small by today's standards.

Still, finding a company that can reliably generate these returns is no easy task. But if quantum computing takes off, I think IonQ could do it.

IonQ is going to be a major player in quantum computing

Few companies are going to be as vertically integrated in the quantum computing space as IonQ. Its primary product will be centered around its quantum computers.

Management is taking a different approach than most companies because it's using a technique known as trapped ion versus the more common superconducting approach. Trapped ion technology yields more accurate results, but at the cost of processing speed. Currently, there are two primary holdups for making quantum computing viable from a commercial standpoint: accuracy and size.

IonQ has already taken a major step to remedy the first problem; Its trapped-ion approach holds the world record in two-qubit gate fidelity, a common measure of accuracy among quantum computing companies. This technology will be the basis of its 256-qubit quantum computer, which will make it one of the largest and most capable available for purchase.

This unit is expected to be available in early 2027 and has already resulted in several orders. If this device is popular and starts to see large-scale early adoption, that could vault IonQ to the front of the quantum computing race and give it an early advantage that will be hard to defeat.

But that's not the only way the company can profit from quantum computing. This year, it closed its acquisition of SkyWater, giving it access to fabrication facilities to help develop its quantum chips.

It also recently purchased Elisity, a cybersecurity platform. Quantum computers will create new risks since they can easily defeat current security measures through brute force. The same reason that companies want to use them for business (their raw computing capability) is the same thing that makes them dangerous from a security standpoint. With IonQ positioning itself to be a major cybersecurity provider as well, it gets to play both sides of the game.

Management has a great game plan and looks to be executing at a high level, but how could that make the stock a 10-bagger by 2035?

Getting to $120 billion isn't as hard as it seems

IonQ is unprofitable right now, so the best we can do is value it on sales. Many traditional computing companies trade for about 10 to 20 times sales, so if we use the low end of that range to value IonQ, it must generate $12 billion in annual revenue to reach the $120 billion valuation threshold.

Next year, Wall Street analysts project the company will generate just over $800 million in revenue, so it has a way to go to get to that level. However, we have yet to see quantum computing take off.

Companies in the industry are pointing toward 2029 as the arrival date of viable commercial quantum computing, and that could ignite a huge race to gain access to the technology. There are also projections from firms like McKinsey & Company that the industry could generate up to $72 billion annually by 2035. That doesn't include important offshoots like cybersecurity, so there's a clear pathway for IonQ to reach the $12 billion in its revenue threshold by then if its products truly take off.

However, there's no guarantee that quantum computing will catch on or that IonQ will be the one to provide a viable device. That makes it a high-risk, high-reward stock.

While I'm OK with investing in these types of companies, your position size needs to be kept relatively small to manage risk. As long as you're aware of that, I think IonQ will be a great investment to own over the next decade.

Keithen Drury has positions in IonQ. The Motley Fool has positions in and recommends IonQ. The Motley Fool has a disclosure policy.