Although the artificial intelligence (AI) arms race is still ongoing and heating up, there's another important computing trend that's on the horizon: quantum computing. Quantum computing may not completely replace traditional computing, but it can aid in increasing the speed and efficiency of the computing infrastructure that we currently have.
There are multiple ways to invest in this trend, but two of my favorite pure plays are IonQ (IONQ +0.38%) and D-Wave Quantum (QBTS +3.89%). I think Nvidia (NVDA +1.68%) is a worthy addition to this group, as it still has a long way to run from AI spending and will also help bridge the gap between quantum computing and traditional computing.
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IonQ and D-Wave Quantum
IonQ and D-Wave are two quantum computing start-ups that are incredibly risky. For both companies, quantum computing is the only business they're pursuing, so if they don't develop a viable quantum computing option, then their stocks will likely go to zero. On the flip side, if their quantum computing solutions become popular and they sell a ton of quantum computing units, then their stocks could skyrocket and make investors a fortune.
These two are taking two separate approaches to the quantum computing realm. IonQ is using a trapped-ion approach, which has advantages over the more traditional superconducting technique. Trapped-ion quantum computing can be done at room temperature and offers a significant accuracy boost. Computing accuracy is the primary problem with quantum computing right now, and solving this issue will ensure that IonQ's products are commercially viable. The trapped-ion approach comes at the cost of processing speed, but I think the advantage that IonQ has in accuracy will be enough to propel it to become a market leader.
NYSE: IONQ
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D-Wave is taking an even more different approach. Instead of building an all-purpose quantum computing unit, its technology focuses on quantum annealing. This is perfect for optimization problems (think an AI model or a logistics network). This represents a large chunk of the expected quantum computing market, so building a solution that's optimized for these types of problems could be a genius move by D-Wave.
NYSE: QBTS
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We're still a ways out from seeing viable quantum computing options commercially available, and many companies point toward 2030 as the year this will occur. Time will tell which company wins the quantum computing arms race (it may not be IonQ or D-Wave), but the winner will surely see a massive boom in its stock price and make investors mini fortunes.
Nvidia
Nvidia is the current king of AI computing hardware thanks to its impressive graphics processing units (GPUs). However, once quantum computing arrives, its GPUs will no longer be the most powerful general-purpose computing units in town. In order to prevent itself from getting disrupted, Nvidia has developed software that allows quantum computing units to be integrated into existing accelerated computing infrastructure. Nvidia's CUDA software allowed it to jump to an early lead in the AI arms race, and its CUDA-Q software will likely do the same once quantum computing is commercially available.
NASDAQ: NVDA
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Additionally, the AI arms race is far from over. Nvidia expects data center capital expenditures to reach about $600 billion this year, rising to $3 trillion to $4 trillion by 2030. That's massive growth in the computing space, and with Nvidia's hardware being the most popular option, it's set to cash in.
By investing in Nvidia, you're capturing the upside of all of the massive AI deals that have been announced recently while also investing in the future with quantum computing deployment. This makes Nvidia an excellent stock to bridge the gap between these two monstrous trends, and it can make investors a fortune along the way.
