In the fledgling field of quantum computing, IonQ (IONQ -2.16%) has emerged as one of the leading start-up investment options. It holds key contracts with top players in the quantum computing field, like the Air Force Research Lab, and offers top-notch technology.

Although it’s far from a surefire bet, is this quantum computing start-up the best chance at transforming a meager investment into $1 million? After all, quantum computing has the potential to transform high-powered computing. Let’s take a closer look.

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1. IonQ’s error correction is among the best

Quantum computing can potentially be an absolute game changer in the high-powered computing world. It lets users tackle problems they’ve never been able to fully model before (like weather patterns and logistics networks), but it also could have massive implications for artificial intelligence (AI). Quantum computing could deliver huge value for whichever company can win the quantum computing arms race, but each competitor must solve a key problem first: errors.

Unlike traditional computing, quantum computing doesn’t have a clear black-and-white answer. While traditional computers use bits to transmit information, which can only be in the form of a 0 or a 1, quantum computing uses qubits. While qubits collapse down to a 0 or a 1 when measured, they can exist in a state between 0 and 1 during the calculation process. This opens up many possibilities within a calculation, which is why quantum computers could perform better at workloads with thousands of possibilities.

The best way most companies have found to deal with this error issue is to let the qubits interact with each other to reduce errors. While many competitors have placed their qubits in a grid-like system to let the qubits interact with their neighbors, IonQ has taken it a step further. They use all-to-all connectivity, which lets every qubit interact with every other qubit. This leads to unparalleled 2-qubit gate fidelity, and IonQ’s process already has greater than 99.9% fidelity.

This shows that IonQ has already made a fantastic start on the most critical problem with quantum computing, which is why it has several key partnerships.

2. IonQ holds several critical contracts

IonQ holds one of the largest contracts in quantum computing with the U.S. Air Force Research Lab, a facility known for testing cutting-edge technologies. This indicates that quantum computing is not just a future technology; it can be used in its current state.

To further support this option, IonQ hardware is available for use on the three major cloud computing providers: Microsoft Azure, Alphabet‘s Google Cloud, and Amazon Web Services. With IonQ’s hardware becoming more widely available, it’s making key progress in this race. If it can differentiate itself from its competitors and start to capture a customer base, it could create a foothold that would be hard to disrupt.

3. There’s a huge market opportunity for quantum computing

To circle back to the original question, can IonQ be a millionaire-maker stock? I’m not sure. There’s a huge market for quantum computing in the future, but it’s not that large right now. IonQ estimates that the market opportunity will reach $87 billion by 2035, but it’s unlikely that one company will capture that complete market share.

Even if IonQ captures 50% of it and generates around $40 billion in annual revenue, that’s still less than another key quantum computing competitor, IBM. IBM is about a $270 billion company — about 27 times the size of IonQ.

So, can IonQ transform $10,000 into $1 million? Likely not. But can IonQ deliver strong stock performance if it wins the quantum computing arms race? Absolutely. However, this is far from a surefire bet, as the field is ripe with potent competition, and IonQ still has years to go before proving commercial relevancy.

New technologies can be exciting for investors. Artificial intelligence. Electric vehicles. The list goes on. Now, we have a new theme emerging: quantum computing. Stocks such as IonQ (IONQ 8.06%) have soared in recent quarters due to the enormous potential of this technology, which could bring a genuinely new type of computer to market for the first time in close to a century.

Investing in cutting-edge technology can be worthwhile. Case in point, consider Nvidia. However, for every Nvidia that delivers monster 100-bagger returns to its shareholders, there will inevitably be a dozen duds that languish in small-cap territory or even go to zero.

So, which will IonQ be: The next great hypergrowth technology stock or a story stock that turns out to be all hype?

Quantum computing potential

The world has made great progress in increasing its collective computing power since the advent of the transistor in 1947. Making semiconductors ever smaller and exponentially more powerful has enabled the development of a host of technologies, from cloud computing to smartphones and even artificial intelligence (AI), and put them in the hands of the masses.

Still, current methods of building the most powerful computers are highly expensive. Consider the technology of ASML, for example. It makes the lithography machines that play a central (indeed, currently irreplaceable) role in manufacturing advanced computer chips, and its most cutting-edge equipment costs around $378 million per machine. Yet those machines are just one part of a vast computing sector supply chain. No wonder analysts expect the AI infrastructure market to spend hundreds of billions of dollars a year by 2030.

Quantum computers promise a much more efficient method of high-performance computing. Using properties such as quantum superposition, quantum entanglement, and probability amplitudes, early-stage quantum computers can solve certain unusual and complex computing problems dramatically faster than a classical supercomputer would be able to.

This will be important for a few reasons if researchers and developers can keep advancing quantum computers in ways that make them more reliable, accurate, and cost-effective. Such machines should help reduce the costs of developing new drugs and useful chemical compounds for a host of applications, optimizing complex systems of all sorts, and advancing our AI models.

IonQ is one of the companies trying to bring quantum computing technology forward. Clients can already access its first-generation machines via cloud providers such as Amazon Web Services, making it one of the first commercialized quantum computing systems.

IonQ’s large cash burn

The excitement around quantum computing is warranted. In principle, it should offer a tool that can rapidly solve an array of problems that would take a classical machine years — or centuries — to handle. However, for most common uses of computers today, quantum computers wouldn’t actually be an improvement. This is a technology with remarkable long-term promise, but so far, useful real-world applications have been sparse.

IonQ investors need to separate the bold goals of the technology’s boosters from the underlying reality of the business today. The company is generating less than $50 million in annual revenue and burning $129 million a year in free cash flow. With $364 million in cash and equivalents on its balance sheet, IonQ has less than three years before its cushion is used up, and its negative free cash flow has been growing in the wrong direction every quarter. Analysts don’t expect quantum computers to become commercialized for another decade, if not longer. This presents a problem for IonQ.

Moreover, IonQ is far from the only quantum computing research company. Among its rivals in this race are some with much larger balance sheets like Microsoft and Alphabet. This puts it at a disadvantage from an investor perspective given how early stage this technology is. IonQ will almost certainly need to tap the capital markets to get the funding it requires to stay afloat — something that its big tech competitors will not have to do. That means the positions of prior shareholders will be diluted.

IONQ Free Cash Flow data by YCharts.

The plain truth about IonQ stock

Investing in early-stage companies can be rewarding. But there is a fine line between investing in an unprofitable company with proven technology and a science project. IonQ looks more like a science project. Quantum computing could be refined to a level where it’s ready for full commercialization, but there’s no guarantee that IonQ will be first to market.

I say all this to illustrate that IonQ is a high-risk stock to invest in. Yet investors are not properly factoring the risk into its shares: Its current market capitalization is $6 billion — for a company that generates less than $50 million in revenue annually and has never been profitable.

IonQ stock is not a buy right now. I will be rooting for the company to succeed, but that does not mean I think it would be intelligent to add it to your portfolio.