Better Quantum Computing Stock: Nvidia vs. IonQ

Key Points

• The power of quantum computers holds the promise of elevating the computing industry to new heights.

• Nvidia and IonQ are working on quantum technology to capture the opportunity in this nascent field.

• Nvidia is developing quantum chips while IonQ aims to build the internet of the future.

• 10 stocks we like better than Nvidia ›

The artificial intelligence market has seen explosive growth over the last few years, and the next sector to follow in AI's footsteps could be quantum computers. The budding tech can perform calculations beyond the capabilities of today's supercomputers, promising to supercharge AI and the entire computing industry.

Although Nvidia (NASDAQ: NVDA) is often associated with artificial intelligence, it's investing in quantum computing as it looks toward the future. Pure-play quantum computer company IonQ (NYSE: IONQ) aspires to replace the current internet with a quantum-powered version.

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Could Nvidia or IonQ stock prove to be a great way to invest in quantum technology? Let's dig deeper into both businesses to determine which could be the better long-term investment.

Image source: Getty Images.

IonQ's quantum tech ambitions

IonQ has big plans for the future of quantum computing. According to its chairman and former CEO, Peter Chapman, the company seeks "to build the next generation of the internet."

To that end, it's constructing a quantum computing network. The current internet exists thanks to computer networking. Extending that capability to quantum devices would scale the computational power they deliver, helping scientists find new solutions in areas such as fusion energy and medicine.

IonQ has been on a tear, acquiring businesses to achieve this objective. In January, it acquired Qubitekk, a leading quantum networking company. In May, it added ID Quantique, which works on quantum network security, and Lightsynq Technologies, a specialist in extending the range in which quantum computers can be connected.

However, the company's goal of building a quantum-based internet is costly. IonQ wrapped up Q1 with $7.6 million in revenue, but an operating loss of $75.7 million, a substantial jump from the previous year's loss of $52.9 million.

Compared to the sales coming in, such an enormous loss is unsustainable over time. That's why IonQ amassed cash and short-term investments of $588.3 million on its Q1 balance sheet. To add to its war chest, the company is pursuing a $1 billion equity offering.

Nvidia's measured quantum approach

Nvidia catapulted to a record $4 trillion market cap on the back of popular AI products such as its graphics processing unit (GPU). As it looks toward a future with quantum computers, the company is now working on a quantum processing unit (QPU).

Current quantum computers are prone to errors in calculations. As a result, Nvidia's approach is to marry its GPUs and QPUs in a hybrid quantum system that can address calculation errors in real time. Leveraging its GPU framework is a smart stepping stone from today's classical computers to quantum devices.

The company's ability to jump ahead of the curve is illustrated in its AI success, which led to record revenue of 130.5 billion in its 2025 fiscal year, ended Jan. 26, an astounding 114% year-over-year increase. It followed up this performance with 69% year-over-year growth to $44.1 billion in its fiscal first quarter, ended April 27.

Nvidia is also a profitable business with Q1 operating income of $21.6 billion, representing 28% growth over the previous year.

The company's dedication to groundbreaking technology is demonstrated in its construction of a research center to advance quantum computing. Nvidia CEO Jensen Huang explained the purpose behind this center by stating it is "where breakthroughs will be made to create large-scale, useful, accelerated quantum supercomputers."

Making a choice between Nvidia and IonQ stock

Both Nvidia and IonQ are assembling impressive quantum computing systems. But which wins out as the better long-term investment in this nascent field?

IonQ's ambitions are extraordinary, yet constructing the quantum internet of the future is taking considerable resources. Moreover, its Q1 revenue of $7.6 million was flat compared to the prior year, calling into question whether it can grow sales to keep pace with the spending needed to achieve its lofty objectives. The company may be biting off more than it can chew.

Meanwhile, Nvidia's runaway AI success enabled it to stockpile $53.7 billion in cash and short-term investments in its fiscal first quarter. It also exited the quarter with $26.1 billion in free cash flow, up from $14.9 billion in the prior year. These considerable resources position the company to tackle the existing challenges in quantum computing, particularly those hindering the tech's ability to cost-effectively scale.

On top of that, looking at IonQ and Nvidia's share price valuation, it's clear that Nvidia is the better value. The price-to-sales (P/S) ratio is a commonly used metric for this assessment, especially for businesses that aren't profitable, such as IonQ.

Data by YCharts.

The chart above shows IonQ's P/S ratio has been on the rise since dropping earlier in the year, and is now more than eight times greater than Nvidia's. This suggests IonQ's stock is overpriced.

Nvidia's more attractive share price valuation, combined with its many other strengths, makes it the superior quantum computing investment. That said, Nvidia stock is on fire, having hit a 52-week high of $174.25 on July 18. As a result, you may want to wait for its share price to drop before buying.

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Robert Izquierdo has positions in IonQ and Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.