Making a million dollars on a stock investment is one of those classic goals you hear many investors say they dream about. And in some rare cases, the dream of a massive return that generates life-changing profits does come true. Investors who took a chance on high-flying Nvidia (NVDA -1.19%) back in 2016 and held on are a recent example: $8,000 worth of the tech giant's stock bought in 2016 would be worth roughly $1 million today.

To be clear, Nvidia is a rare case. Most stocks won't end up being such massive successes in such a short time frame. One way you can try to maximize your potential return is by targeting investments with modest market caps.

Recursion Pharmaceuticals (RXRX -5.92%) is worth just over $2 billion today. It also happens to be a company that Nvidia has invested in. With some lofty goals and hopes for the future, Recursion is a stock that some investors are incredibly bullish on.

Does this healthcare stock have the potential to be a millionaire-making investment?

Why investors are bullish on Recursion

The reason investors are optimistic about Recursion Pharmaceuticals is the company's potential to transform the healthcare industry. Last year Nvidia invested $50 million into the company, as part of a multiyear collaboration to use artificial intelligence (AI) to help develop "groundbreaking foundation models" that can help speed up the pace of drug discovery.

For pharmaceutical companies, getting drugs to market can be a time-consuming and costly process. If there's a way for AI to help make that process more efficient, then it could be a game changer for the industry. And with Nvidia at the forefront of AI, there's arguably no better tech company for Recursion to partner with on this ambitious venture.

Investors are taking on a lot of risk with the stock

As Recursion's modest market cap implies, this is a fairly unproven healthcare stock right now. Over the trailing 12 months, Recursion has incurred a net loss of more than $354 million. During that time, it has also burned through nearly $317 million.

Shares of Recursion skyrocketed in 2023 when investors learned that Nvidia invested in the company. But soon afterward, the hype died down; in 2024, the stock has declined by 7% thus far. There isn't much at this stage, besides hope, to justify why Recursion Pharmaceuticals could be a good stock to buy. It doesn't have any approved products, and while its target is an ambitious one, the company is nowhere near proving that it can significantly accelerate drug discovery for itself or for other drug companies.

There could be a ton of upside if Recursion develops a successful AI model -- but it's a big 'if'

If you were to make a $10,000 investment in Recursion's stock, you would need that investment to grow to 100 times its value for it to be worth $1 million. If that happened, Recursion's valuation would swell to more than $217 billion. If the company truly revolutionizes healthcare, it's not an impossible scenario to envision in the very long run.

But that would be the ultimate dream scenario for investors. Large companies have tried and failed to revolutionize healthcare in the past. In 2021, Amazon, JPMorgan Chase, and Berkshire Hathaway abandoned a healthcare venture they were working on that was aimed at cutting costs and simplifying the healthcare system. They decided the system was too complex, and that healthcare was "too big of a problem" to solve.

This doesn't mean Recursion and Nvidia can't make their venture work. But if three highly successful organizations, including a tech giant like Amazon, have struggled to make drastic improvements in healthcare, I wouldn't hold my breath on the outlook being a whole lot different now. AI has come a long way since then, but this is still not a small undertaking.

Recursion is a speculative play with a ton of risk

Recursion is a highly risky investment, and the company has an ambitious goal that I'm not optimistic it can achieve. Without some proof that the business is on the right track, you're likely better off avoiding the stock. Unless Recursion can demonstrate that its AI model is the real deal or that it's been able to bring its own drugs to market, it's going to remain a highly speculative investment.

This is not a stock you should expect to make you rich, and even outperforming the market may be a stretch.