One company stands at the center of the world of artificial intelligence (AI). It's Nvidia (NVDA +0.19%). I suspect the GPU maker would probably rank at the top of the list for many investors if they were asked to name the most important AI stock.
But what's the most important quantum computing stock of all? Several contenders come to mind. However, I'd argue that Nvidia deserves this honor, too. A recent development underscores why.
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Igniting a quantum computing rally
Last week, several of the most prominent quantum computing stocks rallied big-time. IonQ's (IONQ +4.84%) shares have skyrocketed 60% over the last five days, as of the market close on April 20. D-Wave Quantum's (QBTS 0.14%) stock is up 47%. Quantum Computing Inc. (QUBT +2.72%) and Rigetti Computing (RGTI 0.86%) jumped 35% and 29%, respectively.
NYSE: IONQ
Key Data Points
What caused those tremendous gains? Quantum Computing Inc. and Rigetti didn't announce any news last week. D-Wave's CEO, Alan Baratz, was on stage at two conferences on April 14 and 15, but his remarks didn't move the needle much for the stock.
IonQ was the only member of the group to report major news last week. The company announced that it achieved a "foundational technical milestone by photonically interconnecting two independent trapped-ion quantum systems." This achievement is a key step in scaling quantum computing beyond one processor. IonQ also announced that it won a contract from the Defense Advanced Research Projects Agency (DARPA).
However, there was a big catalyst for all four quantum computing stocks -- and it came from Nvidia. On April 14, which has become known in the quantum computing industry as "World Quantum Day," Nvidia announced the launch of Ising, a new family of open-source models for building quantum computers.
Nvidia CEO Jensen Huang said in a press release, "With Ising, AI becomes the control plane -- the operating system of quantum machines -- transforming fragile qubits to scalable and reliable quantum-GPU systems." Ising includes data, models, and tools that accelerate quantum processors.
Extending AI dominance to quantum computing
Nvidia built its dominance in AI not just with its GPUs but also with its software, CUDA (Compute Unified Device Architecture). The company is taking a similar approach in quantum computing. Its open-source platform CUDA-Q, which was formerly known as CUDA Quantum, is used by multiple quantum hardware leaders.
CUDA-Q performs a role similar to that of an orchestra conductor. Just as the conductor directs the string section, percussionists, and the rest of the orchestra to perform together in a complex symphony, Nvidia's platform brings GPUs, CPUs, and quantum processing units (QPUs) together in harmony to run complex quantum computing applications.
NASDAQ: NVDA
Key Data Points
Quantum computing and AI are joined at the hip. While quantum computers are great at some tasks, such as cryptography, optimization, and simulation, they benefit from AI in managing qubits to minimize errors, refining quantum algorithms, and interpreting results.
Nvidia isn't trying to win the race to develop a large-scale quantum computer. It's leaving that competition to IonQ, D-Wave, and others. But what Nvidia is doing is building a middleware layer that all the companies in the quantum computing space use. This is the same playbook that Nvidia used in AI to become the world's largest technology company by market cap.
Most important and best pick-and-shovel stock?
I think Nvidia's strategy has made it the most important quantum computing stock, just as it is arguably the most important AI stock. But is it the best quantum computing stock to buy right now? Maybe. Is it the best pick-and-shovel stock in quantum computing? Definitely (at least, in my opinion).
Nvidia will profit as quantum computing technology advances, regardless of which hardware approach is ultimately proven best. I view the stock as the ideal way to gain exposure to quantum computing without having to pick an individual winner.
