Quantum Vs AI: Nvidia's Next Big Bet Could Supercharge These 2 ETFs

Make way, AI. Quantum computing could be the next technology frontier that investors clamor to venture into, and Nvidia Corp‘s NVDA reported investment in quantum upstart PsiQuantum could just be the match that ignites the fire.

As per Reuters, Nvidia is in deep discussions to heavily invest in PsiQuantum, a company developing quantum computers on a scalable basis with the use of mainstream chip production — an applied benefit that gives it an edge over competitors employing more unusual approaches.

PsiQuantum is currently collaborating with the U.S. and Australian governments to construct systems in Chicago and Brisbane. This year, it reportedly raised $750 million in investment from investors such as BlackRock, taking its valuation to $6 billion.

This might be a watershed moment for the quantum theme. For investors not yet willing to take a plunge in early-stage startups per se, quantum and AI-oriented ETFs offer a more diversified entry into exposure. Two names that always seem to be mentioned together are the Defiance Quantum ETF QTUM and the WisdomTree AI & Innovation Fund WTAI.

Also Read: Hewlett Packard, Nvidia Deepen Collaboration On AI Factory Solutions

But as the quantum chatter rises, which of these ETFs is best suited to ride the wave?

Nvidia: The Common Ground

Both funds share one major trait — a heavy stake in Nvidia. And right now, that's not a bad place to be. The chipmaker sits at the heart of the AI boom, but this year, it's also been signaling growing interest in the quantum computing space.

In March, Nvidia announced a quantum research center in Boston in conjunction with Harvard and MIT.

It’s now said to be in negotiations to invest millions in PsiQuantum, a company that might develop usable quantum systems much sooner than originally anticipated.

This is a stark contrast to CEO Jensen Huang‘s previous opinion that real-world quantum computing was “decades away.” Nvidia’s changing position might propel a re-rating of quantum exposure within tech portfolios, and QTUM and WTAI are both poised to profit.

The Investment Angle

QTUM is for the investor who desires exposure to the theme of quantum without venturing too far into the realm of speculation. It features solid players such as Honeywell HON and Alphabet GOOGL, and employs a rules-based index approach that keeps its sights firmly fixed on machine learning and quantum progress. Notably, D-wave Quantum Inc QBTS, a pure-play quantum company, currently has found its way to the top position in the fund’s portfolio.

WTAI, however, is a more accommodating fund. It holds riskier innovators like AMD AMD, apart from companies dabbling in quantum computing. This fund may be riskier but might also deliver unusually large returns if quantum and AI come together sooner than anticipated.

The Bottom Line

Nvidia’s PsiQuantum acquisition may signal the start of a new chapter in the quantum computing saga, one where functionality starts to supplant sheer theory. For cautious investors looking to play the quantum game, QTUM and WTAI present two distinct, but attractive, paths into the quantum narrative.

Want something more traditional with a dash of quantum? QTUM may be your cup of tea.

Want a tech-agnostic innovation play with a quantum punch? WTAI may be the preferable option.

Either way, it appears Nvidia’s next gamble may very well reboot the quantum discussion, and these ETFs are patiently ready to shine.

Read Next:

• Only 3 Mag 7 Stocks Pass Peter Lynch’s Favorite Valuation Test – Tesla Isn’t One of Them

Photo: Shutterstock