Key Points
The artificial intelligence (AI) and quantum computing markets have both grown rapidly in recent years. AI companies are reshaping the world by optimizing, accelerating, and automating various tasks, and they’re changing how people create and consume content. Quantum computers, which can process certain computing tasks much faster than classical computers, are expanding beyond niche research projects toward more commercial applications.
Nvidia (NASDAQ: NVDA) and Infleqtion (NYSE: INFQ) represent two ways to invest in these expanding markets. Nvidia is the world’s largest producer of data center GPUs, which top AI companies use to train their large language models (LLMs) and AI algorithms. Over the past 12 months, Nvidia’s stock has risen nearly 80% as its GPU sales soared.
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Infleqtion is an emerging producer of quantum-enabled sensors and precision timers, and it’s building its own quantum computing systems. It went public through a merger with a special purpose acquisition company (SPAC) this February, but its stock has declined 16% since its market debut. Let’s see why the AI leader outperformed the quantum upstart — and if the former will remain the better growth play for the foreseeable future.
Why did Nvidia’s stock rally?
From fiscal 2016 to fiscal 2026 (which ended this January), Nvidia’s revenue and net income grew at CAGRs of 45% and 69%, respectively. Most of that growth spurt was driven by new generative AI applications, which supported the rapid expansion of the AI market.
Nvidia provides the best “picks and shovels” for training AI algorithms, and its proprietary software platform locks in its customers. It now controls over 90% of the discrete GPU market, while its top competitor, AMD, holds a single-digit share.
Nvidia maintained its lead through its Turing (2019), Ampere (2020), Hopper (2022), and Blackwell (2024) chip architectures. It will launch its next chip architecture, Rubin, in the second half of 2026. Its pricing power improved as it dominated the growing AI training market, which boosted its gross margin from 51.6% in fiscal 2016 to 71.1% in fiscal 2026.
From fiscal 2026 to fiscal 2029, analysts expect Nvidia’s revenue and EPS to both grow at CAGRs of 39%. Those are incredible growth rates for a stock that trades at 25 times this year’s earnings. While Nvidia faces some competition in the data center market from custom AI chips for inference tasks, it’s still one of the easiest ways to profit from the AI market’s long-term growth. That’s probably why it crushed the market over the past year.
Why did Infleqtion’s stock slump?
Infleqtion refrigerates neutral atoms and manipulates them with lasers to make quantum calculations. It uses that technology to create quantum sensors and timing products, including atomic clocks, gravimeters, and inertial navigation systems.
These devices can be used for navigation without GPS, subsurface mapping for locating resources, and improving wireless communications with more precise timing signals. DARPA, NASA, and other government agencies are buying these sensors and timing products because traditional GPS, communications, and radar systems can be easily disrupted. Most of Infleqtion’s revenue comes from these government contracts.
Infleqtion’s pre-merger financials are a bit murky. But in 2025, generated $32.5 million in revenue. Analysts expect that figure to more than double to $69.4 million in 2028 as it secures more government contracts and expands its fledgling quantum computing systems business.
However, Infleqtion is deeply unprofitable, and it already trades at 37 times its 2028 sales. That high price-to-sales ratio suggests too much growth was already baked into its stock upon its public debut. As a niche maker of quantum sensors and timing products, it’s also attracting less attention than builders of full-fledged quantum computing systems like IonQ.
The better buy: Nvidia
I believe Nvidia will still outperform Infleqtion this year for four reasons: it’s growing faster, its moat is wider, its profits are soaring, and it’s more reasonably valued. Infleqtion might be worth nibbling on as a speculative play on the nascent quantum computing market. Still, it probably won’t grow into its valuations and rally until it proves its business model is sustainable.
Should you buy stock in Infleqtion right now?
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, IonQ, and Nvidia. The Motley Fool has a disclosure policy.
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