In a reflection of the past decade, investors might lament their decision not to invest in a striking quantum computing stock, revealing it's not IonQ seizing the spotlight.
Nvidia, the tech giant known for its graphics processing units (GPUs) and industry-leading chip empire, is making a bold move into the quantum computing arena. The company's strategic approach, which leverages its existing AI and high-performance computing (HPC) infrastructure, is setting it apart from pure-play quantum companies.
A key component of Nvidia's quantum strategy is the combination of CUDA, its software platform, and GPUs. CUDA, which serves as the backbone for Nvidia's tech stack, allows software developers to run AI applications on their hardware. Now, Nvidia has developed an extension of CUDA called CUDA-Q, designed for applications in both traditional computing and quantum processing.
CUDA-Q could potentially become an essential layer for quantum computing, similar to CUDA's role in modern AI development. Nvidia claims its quantum error correction algorithms are ten times faster than others, positioning it as a key operating system provider for quantum-classical integration, particularly in drug discovery and AI optimization.
Nvidia's focus on hybrid quantum-classical computing is evident in its partnerships and investments. In 2025, it operates a $1.2 billion Boston-based quantum research facility (NVAQC) collaborating with Quantinuum on combining Nvidia's GB200 supercomputers and System H2 quantum processors to push hybrid quantum applications.
The company holds strategic partnerships with elite research institutions like Harvard and MIT, and participates in DARPA's $1.2 billion quantum initiative, underlining its leadership in quantum benchmarking and industry adoption. Despite quantum-related revenue being at an early stage, Nvidia’s substantial cash reserves ($53.7 billion) and dominant AI ecosystem bolster its quantum ambitions.
Nvidia's long-term prospects in the quantum computing arena are being assessed as a potential investment opportunity for investors with a long-term time horizon. The company's pragmatic hybrid strategy and massive quantum-capable infrastructure have led analysts to consider Nvidia undervalued compared to speculative quantum startups.
In contrast, companies such as IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. (QCi) have P/S multiples reminiscent of stock market bubbles. QCi's P/S ratio is nearly 4,800, considerably higher than its peers, due to generating only $385,000 in sales over the past year. Much of the long-run upside may be priced in to IonQ and smaller, speculative quantum computing stocks.
Nvidia, on the other hand, is the cheapest quantum computing stock in the cohort based on P/S multiples. This suggests that investors are not yet pricing in the upside of emerging AI applications such as quantum computing. The upside of these applications is being discounted by investors in the valuation of Nvidia stock, making it a compelling buy-and-hold opportunity as more advanced AI applications, including quantum computing, unfold over the next decade.
In summary, Nvidia is actively building both hardware-software ecosystems for quantum computing, focusing on hybrid quantum-classical solutions, error correction advancements, and collaborative R&D, while recognizing quantum computing’s full practical impact is still years away. The company's strategic approach and massive infrastructure position it as a central source for both hardware and software in the quantum computing field.
[1] Investor's Business Daily, "Nvidia's Quantum Leap: Building a Quantum-Ready Ecosystem", link [2] The Verge, "Nvidia's Quantum Computing Plans Focus on Hybrid Quantum-Classical Computing", link [5] Seeking Alpha, "Why Nvidia is the Best Play in Quantum Computing", link
- Nvidia's strategic investment in quantum computing, involving its AI and high-performance computing infrastructure, has positioned the company as a key player distinct from pure-play quantum companies.
- Nvidia's development of CUDA-Q, an extension of its CUDA software platform, aims to serve as a crucial layer for quantum computing, similar to CUDA's role in modern AI development.
- Nvidia's focus on hybrid quantum-classical computing, outlined in its partnerships and investments, presents a compelling buy-and-hold opportunity for investors with a long-term time horizon.
- While quantum-related revenue is still in its early stages, Nvidia's substantial cash reserves and dominant AI ecosystem, coupled with its strategic approach and massive quantum-capable infrastructure, lend credence to its ambitious quantum computing plans.
