NVIDIA vs. IONQ: Which is the Better AI Stock By Far, and a Buy?

Semiconductor behemoth NVIDIA Corporation NVDA and quantum computing company IonQ, Inc. IONQ offer valuable contributions to the artificial intelligence (AI) field, making them appealing to investors. Shares of NVIDIA surged 26.3% over the past year as its highly regarded graphic processing units (GPUs) became indispensable for AI applications. Shares of IonQ also soared 89.5% in the past year as quantum computers promise to solve complex glitches beyond the competencies of traditional computers.  This makes it worth asking which high-flying AI stock is a better buy now. Let’s explore – Reasons to be Bullish on NVIDIA StockThe growing demand for the Internet of Things and the increase in sales of portable electronics are expected to boost the GPU market worldwide, with its size expected to grow from $101.54 billion in 2025 to $1,414.39 billion by 2034, according to Precedence Research. Thus, NVIDIA’s market leadership in GPUs will drive the company’s future growth. NVIDIA’s market share in discrete GPUs is over 80%, per Mercury Research.NVIDIA is also well-poised to take advantage of the significant data center investments by tech giants like Microsoft Corporation MSFT, Alphabet Inc. GOOGL and Meta Platforms, Inc. META. In its latest quarterly result that ended on Jan. 26, NVIDIA’s data center revenues climbed 93% to $35.6 billion. With data center spending projected to reach $2 trillion in the next five years, further growth is expected in its data center revenues.DeepSeek’s threat, by the way, is exaggerated. Its low-cost large language model will sooner or later drive more use of computing power and benefit NVIDIA. The chipmaker, anyhow, has ample resources to make cost-effective products and enhance the AI ecosystem. Moreover, as the demand for AI data infrastructure grows, companies will turn to NVIDIA for processors. Needless to say, the demand for NVIDIA’s Blackwell AI processor exceeded Wall Street expectations and touched $11 billion in sales in the fourth quarter of fiscal 2025.Reasons to be Bullish on IonQ StockIonQ’s quantum computing system aids Amazon.com, Inc. AMZN and Microsoft in providing AI researchers with access to quantum computing models. IonQ is well-poised to benefit from the growth in the quantum computing market, which is estimated to reach $2 trillion by 2035, per McKinsey.IonQ also stands out in the quantum computing space due to its creation of linear chains of ions that can reach 100-plus qubits, resulting in a lesser number of errors compared to other quantum computers. No doubt, IonQ’s revenues in the fourth quarter jumped 92% to $11.7 million. Revenues are likely to improve further as quantum computing is a burgeoning field that is much needed in the life sciences, chemical and financial sectors.Is NVIDIA a Better Buy Than IonQ?Despite the positives, NVIDIA has the upper hand over IonQ. This is because quantum computing is a speculative field, and its practical applications are limited at the moment. NVIDIA CEO Jensen Huang has already said that it would take a minimum of 15 years for quantum computers to be commercialized, something that doesn’t bode well for IonQ. Additionally, big tech players are positioning themselves to enter the quantum computing market, which could make IonQ a takeover target without benefiting shareholders. IonQ’s negative 75.3% return on equity contrasts sharply with NVIDIA’s 117.6%. Image Source: Zacks Investment ResearchBy any measure, IonQ’s price-to-sales ratio of 103.6 is very high. And the company remains unprofitable despite an uptick in revenues. This is because IonQ posted a net loss of $202 million in the latest reported quarter.On the other hand, NVIDIA reported GAAP earnings per share of $0.89 in the recently reported quarter, up 82% from the year-ago quarter. NVIDIA is also reasonably priced. Per the price/earnings ratio, NVIDIA trades at 26.0X forward earnings. In comparison, the Semiconductor - General industry’s forward earnings multiple is 30.53.Image Source: Zacks Investment ResearchTo conclude, NVIDIA seems like a strong AI stock choice presently, while risk-tolerant investors may also consider having IonQ stock in their portfolio. Both stocks have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. 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(IONQ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks