Merging AI and Quantum Computing: Here's the Stock to Watch
With its cutting-edge GPUs, Nvidia is a formidable force in the AI industry.
Collaborating with quantum computer developers and Japanese researchers, Nvidia is applying its AI capabilities to advance quantum computing.
While Nvidia stock seems pricey, it's a no-brainer option for investors seeking both AI and quantum computing exposure.
10 stocks we like better than Nvidia ›
Bread is great. Meat -- or the vegetarian filling of your choice -- is great, too. But it was the Earl of Sandwich who married the two in the 1700s to create the sandwich as we know it.
The race to integrate artificial intelligence (AI) and quantum computing doesn't require the ingenuity of an English nobleman. Today, tech leaders are racing to incorporate the two technologies to revolutionize computing abilities.
While Nvidia (NASDAQ: NVDA) is often recognized as an AI industry stalwart, the company is also helping to advance quantum computing, making it a smart choice for those interested in gaining simultaneous exposure to the two burgeoning industries.
The company for all AI seasons
It's hard to overestimate Nvidia's position as an AI leader, since it has a hand in the varying niches of the AI field. Nvidia AI Foundry, for example, offers customers an end-to-end platform and service for constructing custom generative AI models, including large language models and AI chatbots. Additionally, Nvidia AI Enterprise provides a cloud-native suite of software tools, libraries, and frameworks.
Nvidia's graphic processing units (GPUs) provide the backbone for its AI proficiency. The company's latest GPU architecture, Nvidia Blackwell, is in high demand from data centers, where AI computing occurs. Earlier in July, hyperscaler CoreWeave announced that it was "the first cloud provider to deliver this groundbreaking GPU architecture for AI, graphics, and high-performance computing workloads."
Like CoreWeave, hyperscaler peer Nebius is rolling out availability to Blackwell architecture to customers, and the company is, unsurprisingly, extremely enthusiastic. In June, Nebius announced that the Blackwell architecture was now available to customers in Europe. With respect to the United States, Nebius is developing a data center in New Jersey that the company plans on singularly dedicating to Nvidia Blackwell-architecture GPUs.
Making the quantum leap
Unlike companies such as IonQ and Rigetti Computing, which are building actual quantum computers, Nvidia is taking a different -- though necessary -- tack to advancing the nascent field. For one, Nvidia is building a research center in Boston that will integrate its Nvidia GB200 Grace Blackwell superchip (providing advanced AI computing) with quantum computing hardware. The result will be accelerated quantum supercomputing that Nvidia says "will help solve quantum computing's most challenging problems, ranging from qubit noise to transforming experimental quantum processors into practical devices." A qubit is the basic unit of information in quantum computing.
Providing 2,020 of its H100 GPUs interconnected by its Quantum-2 InfiniBand networking platform to Japan's National Institute of Advanced Industrial Science and Technology (AIST), Nvidia is also playing a pivotal role in facilitating progress at the ABC1-Q, the world's largest research supercomputer dedicated to quantum computing. In addition, the system is integrated with Nvidia CUDA-Q, an open-source hybrid computing platform that assists hardware and software to conduct enormous quantum computing applications.
Speaking to the collaboration between Nvidia and the AIST, Tim Costa, Nvidia's senior director of computer-aided engineering, quantum and CUDA-X, was quoted as saying:
Seamlessly coupling quantum hardware with AI supercomputing will accelerate realizing the promise of quantum computing for all. Nvidia's collaboration with AIST will catalyze progress in areas like quantum error correction and applications development -- crucial for building useful, accelerated quantum supercomputers.
Is Nvidia a no-brainer buy today for AI and quantum computing exposure?
There are several AI leaders and a handful of quantum computing pioneers, however, Nvidia is one of the very few companies developing technologies for both tech fields. This makes it an obvious consideration for those interested in a single investment that provides exposure to both corners of the tech industry.
Taking a quick look at the stock's valuation, investors may conclude that shares are pricey now, trading at roughly 56 times trailing earnings. It's important to recognize, though, that Nvidia's position as a semiconductor and AI powerhouse has led to it commanding a higher valuation -- it's five-year average trailing P/E is 70.
Therefore, investors shouldn't dismiss the stock as unattractively valued. And though there may be bumps in the road as these two fields mature, Nvidia is an excellent choice for investors looking to be in position to prosper from the growth of AI and quantum computing.
Should you invest $1,000 in Nvidia right now?
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Revenue (GAAP) reached $239 million, ahead of analyst expectations of $152.61 million, while diluted earnings per share (GAAP) came in at $0.62, well above the expected loss of $0.04. While the company beat expectations decisively, its business model is in transition, with product sales falling sharply and partnership revenues comprising the bulk of results this period. Metric Q2 2025 Q2 2025 Estimate Q2 2024 Y/Y Change EPS – Diluted $0.62 ($0.04) $0.99 (37.4 %) Revenue $239 million $152.61 million $415 million (42.4 %) Product Sales $11 million $23 million (52.2 %) Licensing, Royalties and Other Revenue $229 million $393 million (41.7 %) Net Income $107 million $162 million (33.9 %) Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Company Overview and Success Drivers Novavax is a biotechnology company specializing in the development of recombinant protein-based vaccines, including its COVID-19 shot and the adjuvant Matrix-M, which enhances immune responses. Its core offering, Nuvaxovid, is the only recombinant protein-based, non-messenger RNA (mRNA) COVID-19 vaccine currently available in the U.S. In recent quarters, Novavax has shifted its focus from building and running a direct sales operation to leveraging strategic partnerships and licensing its vaccine platform to larger pharmaceutical firms. The company's future success hinges on its technology platform, the ability to win significant regulatory approvals, and the effectiveness of its partners—such as Sanofi, Takeda, and others—in bringing products to market and generating milestone and royalty revenues. Quarter Highlights and Financial Shifts This period was marked by outsized partnership revenues and shrinking product sales. 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Research and development (R&D) expenses for the second quarter of 2025 were $79 million, compared to $107 million in the same period in 2024. The decrease was primarily due to reduced expenditures related to COVID-19 vaccine development and the elimination of the associated commercial manufacturing network infrastructure. Selling, general, and administrative expense dropped 57%, reflecting the winding down of Novavax's own commercial activities as partners ramp up their roles. The company's cash and equivalents stood at $628 million as of Q2 2025, down 33.0% from December 2024, but are set to be boosted by expected milestone receipts, including the $175 million from Sanofi due in the third quarter. Working capital (GAAP) swung to a positive $530 million as of Q2 2025, up sharply from a negative position at the end of 2024, indicating improved liquidity and a stronger balance sheet thanks to partnership payments. Business Model, Product Families, and Partnership Strategy Novavax's foundation is its proprietary vaccine technology, which uses protein nanoparticles and the Matrix-M adjuvant to stimulate the immune system. This approach is an alternative to mRNA vaccines like those developed by Pfizer and Moderna. While used initially for COVID-19 (Nuvaxovid), the platform is now being applied to new areas, including malaria, influenza, respiratory syncytial virus (RSV), shingles, and even experimental cancer vaccines. The late-stage COVID-19-Influenza-Combination vaccine and standalone flu programs are being advanced with the intention to out-license or partner before further clinical development. The company has stated it does not intend to launch these vaccine candidates without a partner and will not make additional investments in the program until a partner is in place. (As of Q2 2025, the initial Phase 3 cohort was completed, and the company is seeking a partner to advance and fund all future clinical development, regulatory filing, and commercialization activities.) Novavax reported early positive immune response data in a 2,000-participant safety and immunogenicity study in Q2 2025, with T-cell responses described as "numerically higher than in the comparator Fluzone HD arm." Other parts of the pipeline remain preclinical or in early development, such as candidates targeting H5N1 flu and new projects in oncology and C. difficile. Most Notable Developments During the Quarter Novavax's most significant event was the U.S. FDA approval of Nuvaxovid, which unlocked the milestone payment from Sanofi. Transfers of marketing authorization to Sanofi for the U.S. and European Union (EU) markets are expected in the fourth quarter of 2025. Sanofi is scheduled to assume responsibility in the U.S. for the 2025-2026 COVID-19 vaccination season. 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Both research and development and selling, general, and administrative costs saw major declines, largely attributed to wind-downs in internal commercialization infrastructure and tighter capital allocation. The net result was a substantial improvement in total stockholders' equity (GAAP), which swung from a large deficit at year-end to positive territory, underlining the financial impact of the partnership-driven shift. The company signaled that future profitability would depend on securing further milestone payments, royalties, and strict cost controls, all of which are closely linked to the performance and commercial success of its partners. Looking Ahead: Guidance and Watchpoints Management raised its FY2025 adjusted (non-GAAP) revenue guidance, now expecting $1.00 billion to $1.05 billion. 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Investors should watch for updates on new collaborations, further regulatory milestones, and data from pipeline programs, all of which could drive additional milestone revenue. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,026%* — a market-crushing outperformance compared to 180% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks » *Stock Advisor returns as of August 4, 2025 JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
