With the share prices of so many tech companies surging lately, it’s a good idea to turn a critical eye toward any stock you’re considering buying. Two stocks that are no doubt on many investors’ potential buying lists are Nvidia(NVDA 1.28%) and IonQ(IONQ -0.80%),
These companies have garnered lots of attention lately, especially as their share prices have risen 930% and 857% over the past three years, respectively. So, let’s take a closer look at what’s happening with these companies to determine which one looks like the better AI stock to own in early July, 2025.
How Nvidia benefits from the AI boom
Nvidia quickly went from an obscure tech company that most people hadn’t heard about to one of the most popular artificial intelligence investments in just a few years. The spike in interest has come from Nvidia’s lead in designing semiconductors that are used in artificial intelligence data centers.
Nvidia’s processors account for about 70% to 94% of the AI semiconductor market, and their popularity has pushed the company’s sales and earnings up quickly. Nvidia’s data center revenue spiked 73% in the most recent quarter to $39 billion, and earnings per share rose 27% to $0.76 per share.
There is some debate as to how much more semiconductor demand there will be in the coming years once tech giants have upgraded their old servers and built new ones to handle their AI needs, but that potential slowdown hasn’t arrived yet. McKinsey research estimates that the semiconductor market will grow to $2.4 trillion by 2040, up from about $450 billion in 2019.
With Nvidia’s semiconductor lead, the company is well-positioned to benefit if semiconductor demand remains. Still, one thing investors should be aware of is that Nvidia’s stock isn’t cheap. The rapid share price gains of the past few years mean that Nvidia’s stock has a price-to-earnings ratio of about 50, which is below the current semiconductor company average of 64 but still pricey compared to the S&P 500‘s average of 24.
IonQ is on the fringes of AI
IonQ isn’t actually an artificial intelligence company. It’s a quantum computing company that uses trapped linear chain ions that have the potential to reach 100-plus qubits and produce far fewer errors than other quantum computers.
Where IonQ overlaps slightly with AI is that it offers some of its quantum computing services on Amazon‘s AWS and Microsoft‘s Azure cloud computing platforms, giving AI researchers access to quantum computing processing. Additionally, future developments in quantum computing could result in smarter AI models.
Investors have been pushing up IonQ’s share price, hoping that quantum computing will eventually become a transformational technology. But most real-world applications — like using it to discover new drugs or materials — haven’t happened yet. And even some companies heavily involved in developing their own quantum computers, like Alphabet’s Google, have said commercial quantum computing applications are still at least five years away.
Still, the quantum computing market will be worth an estimated $2 trillion by 2035. This massive opportunity has helped fuel investor optimism in IonQ, but it’s also resulted in making its stock extremely expensive. IonQ’s price-to-sales ratio is an astonishingly high 217, far above the market’s average or even other high-flying tech stocks.
Nvidia is the better AI stock
While Nvidia’s share price isn’t cheap, it’s a far better value than IonQ’s. Nvidia’s lead in the artificial intelligence semiconductor market, its strong earnings and revenue growth, and its potential to continue tapping into the vast semiconductor market should continue to make Nvidia a good long-term investment.
And considering that it’s more focused on AI than IonQ, Nvidia is easily the better artificial intelligence stock in this match-up.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Earlier this month, footage was released of one of Will Smith’s gigs which was allegedly AI-generated.
Snopes agreed that the crowd shots featured ‘some AI manipulation’. You can watch the video below:
Will Smith is being accused of posting a video that features AI-generated shots of fans cheering in the crowd during his tour pic.twitter.com/1Zvmp1p8MgAugust 27, 2025
Eagle-eyed viewers who paused the footage spotted some telltale signs: namely, that the AI ‘fans’ in the video looked less like humans and more like, well, alien creatures in a horror movie who are desperate to suck out your soul. Their hands were elongated and had more fingers than the children of incestuous relationships, while their blurred facial features resembled melted candles in the shape of ghouls.
Nonetheless, it turns out the emotive slogans were real and were held by real Smith fans, such as Patric and Géraldine of Switzerland, who held up a sign saying “‘You Will Make It’ helped me survive cancer. Thx Will’. And to be fair to Smith, it appears that the massive crowds in the video were real: his team had merely used AI to turn still images into short videos.
Green Day laughed at Smith on Instagram, posting a shot of their fans at a gig with the caption: “Don’t need AI for our crowds”.
However, though his motive seems to be simply generating AI videos from stills, Smith’s is unlikely to be the last example we see of performers using AI footage of fans. Every music artist wants a full-to-bursting, over-emotional stadium crowd who are hysterical with joy at seeing their idol(s). So if you, unlike Smith, personally can’t get real footage of that, then why not fake it? (Probably because the internet is full of merciless, critical sleuths who are going to roast you until you’re a smoking heap of charred remains.)
Donald Trump’s team have allegedly paid extras to appear at his rallies to fill spare stadium seats, but that’s expensive and also risky as people might not show up – or, even worse for the team, Democrats might turn up. Generating AI footage is far cheaper, even if it burns trees.
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You could also make your crowds as attractive, young, unisex, and ethnically diverse as you want – even if the pause button does reveal them to be more horrifying than the zombies in I Am Legend.
Reading materials and fliers at the Sacramento Works job training and resources center in Sacramento on April 23, 2024. The center provides help and resources to job seekers, business and employers in Sacramento County. Photo by Miguel Gutierrez Jr., CalMatters
This story was originally published by CalMatters. Sign up for their newsletters.
After three years of trying to give Californians the right to know when AI is making a consequential decision about their lives and to appeal when things go wrong, Assemblymember Rebecca Bauer-Kahan said she and her supporters will have to wait again, until next year.
The San Ramon Democrat announced Friday that Assembly Bill 1018, which cleared the Assembly and two Senate committees, has been designated a two-year bill, meaning it can return as part of the legislative session next year. That move will allow more time for conversations with Gov. Gavin Newsom and more than 70 opponents. The decision came in the final hours of the California Legislative session, which ends today.
Her bill would require businesses and government agencies to alert individuals when automated systems are used to make important decisions about them, including for apartment leases, school admissions, and, in the workplace, hiring, firing, promotions, and disciplinary actions. The bill also covers decisions made in education, health care, criminal justice, government benefits, financial services, and insurance.
“This pause reflects our commitment to getting this critical legislation right, not a retreat from our responsibility to protect Californians,” Bauer-Kahan said in a statement shared with CalMatters.
The pause comes at a time when politicians in Washington D.C. continue to oppose AI regulation that they say could stand in the way of progress. Last week, leaders of the nation’s largest tech companies joined President Trump at a White House dinner to further discuss a recent executive order and other initiatives to prevent AI regulation. Earlier this year, Congress tried and failed to pass a moratorium on AI regulation by state governments.
When an automated system makes an error, AB 1018 gives people the right to have that mistake rectified within 60 days. It also reiterates that algorithms must give “full and equal” accommodations to everyone, and cannot discriminate against people based on characteristics like age, race, gender, disability, or immigration status. Developers must carry out impact assessments to, among other things, test for bias embedded in their systems. If an impact assessment is not conducted on an AI system, and that system is used to make consequential decisions about people’s lives, the developer faces fines of up to $25,000 per violation, or legal action by the attorney general, public prosecutors, or the Civil Rights Department.
Amendments made to the bill in recent weeks exempted generative AI models from coverage under the bill, which could prevent it from impacting major AI companies or ongoing generative AI pilot projects carried out by state agencies. The bill was also amended to delay a developer auditing requirement to 2030, and to clarify that the bill intends to address evaluating a person and making predictions or recommendations about them.
An intense legislative fight
Samantha Gordon, a chief program officer at TechEquity, a sponsor of the bill, said she’s seen more lobbyists attempt to kill AB 1018 this week in the California Senate than for any other AI bill ever. She said she thinks AB 1018 had a pathway to passage but the decision was made to pause in order to work with the governor, who ends his second and final term next year.
“There’s a fundamental disagreement about whether or not these tools should face basic scrutiny of testing and informing the public that they’re being used,” Gordon said.
Gordon thinks it’s possible tech companies will use their “unlimited amount of money” to fight the bill next year..
“But it’s clear,” she added, “that Americans want these protections — poll after poll shows Americans want strong laws on AI and that voluntary protections are insufficient.”
AB 1018 faced opposition from industry groups, big tech companies, the state’s largest health care provider, venture capital firms, and the Judicial Council of California, a policymaking body for state courts.
A coalition of hospitals, Kaiser Permanente, and health care software and AI company Epic Systems urged lawmakers to vote no on 1018 because they argued the bill would negatively influence patient care, increase costs, and require developers to contract with third-party auditors to assess compliance by 2030.
A coalition of business groups opposed the bill because of generalizing language and concern that compliance could be expensive for businesses and taxpayers. The group Technet, which seeks to shape policy nationwide and whose members include companies like Apple, Google, Nvidia, and OpenIAI, argued that AB 1018 would stifle job growth, raise costs, and punish the fastest growing industries in the state in a video ad campaign.
Venture capital firm Andreessen Horowitz, whose founder Marc Andreessen supported the re-election of President Trump, oppose the bill due to costs and due to the fact that the bill seeks to regulate AI in California and beyond.
A policy leader in the state judiciary said in an alert sent to lawmakers urging a no vote this week that the burden of compliance with the bill is so great that the judicial branch is at risk of losing the ability to use pretrial risk assessment tools like the kind that assign recidivism scores to sex offenders and violent felons. The state Judicial Council, which makes policy for California courts, estimates that AB 1018 passage will cost the state up to $300 million a year. Similar points were made in a letter to lawmakers last month.
Why backers keep fighting
Exactly how much AB 1018 could cost taxpayers is still a big unknown, due to contradictory information from state government agencies. An analysis by California legislative staff found that if the bill passes it could cost local agencies, state agencies, and the state judicial branch hundreds of millions of dollars. But a California Department of Technology report covered exclusively by CalMatters concluded in May that no state agencies use high risk automated systems, despite historical evidence to the contrary. Bauer-Kahan said last month that she was surprised by the financial impact estimates because CalMatters reporting found that automated decisionmaking system use was not widespread at the state level.
Support for the bill has come from unions who pledged to discuss AI in bargaining agreements, including the California Nurses Association and the Service Employees International Union, and from groups like the Citizen’s Privacy Coalition, Consumer Reports, and the Consumer Federation of California.
Coauthors of AB 1018 include major Democratic proponents of AI regulation in the California Legislature, including Assembly majority leader Cecilia Aguilar-Curry of Davis, author of a bill passed and on the governor’s desk that seeks to stop algorithms from raising prices on consumer goods; Chula Vista Senator Steve Padilla, whose bill to protect kids from companion chatbots awaits the governor’s decision; and San Diego Assemblymember Chris Ward, who previously helped pass a law requiring state agencies to disclose use of high-risk automated systems and this year sought to pass a bill to prevent pricing based on your personal information.
The anti-discrimination language in AB 1018 is important because tech companies and their customers often see themselves as exempt from discrimination law if the discrimination is done by automated systems, said Inioluwa Deborah Raji, an AI researcher at UC Berkeley who has audited algorithms for discrimination and advised government officials in Sacramento and Washington D.C. about how AI can harm people. She questions whether state agencies have the resources to enforce AB 1018, but also likes the disclosure requirement in the bill because “I think people deserve to know, and there’s no way that they can appeal or contest without it.”
“I need to know that an AI system was the reason I wasn’t able to rent this house. Then I can at an individual level appeal and contest. There’s something very valuable about that.”
“It’s disappointing this [AB 1018] isn’t the priority for AI policy folks at this time,” she told CalMatters. “I truly hope the fourth time is the charm.”
A number of other bills with union backing were also considered by lawmakers this session that sought to protect workers from artificial intelligence. For the third year in a row, a bill to require a human driver in commercial delivery trucks in autonomous vehicles failed to become law. Assembly Bill 1331, which sought to prevent surveillance of workers with AI-powered tools in private spaces like locker or lactation rooms and placed limitations on surveillance in breakrooms, also failed to pass.
But another measure, Senate Bill 7 passed the legislature and is headed to the governor. It requires employers to disclose plans to use an automated system 30 days prior to doing so and make annual requests data used by an employer for discipline or firing. In recent days, author Senator Jerry McNerney amended the law to remove the right to appeal decisions made by AI and eliminate a prohibition against employers making predictions about a worker’s political beliefs, emotional state, or neural data. The California Labor Federation supported similar bills in Massachusetts, Vermont, Connecticut, and Washington.