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QuantumScape Vs. NVIDIA: Which Stock Is a Better Buy Now?

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Key Takeaways

  • QS stock rose 220% after launching its faster, scalable Cobra separator into battery cell production.
  • QS shifted from factory production to a licensing model, aiming to generate tech fees from automakers.
  • NVDA earned $44.1B in Q1 revenues, driven by AI demand and strength in its data center segment.

Manufacturer of solid-state lithium metal batteries, QuantumScape Corporation (QS - Free Report) , recently experienced an increase in its stock price despite low revenues and significant losses. This led to comparisons with NVIDIA Corporation’s (NVDA - Free Report) success in artificial intelligence (AI), causing investors to consider which stock might offer substantial future gains. Let’s find out –  

Reasons to Be Bullish on QuantumScape Stock 

After becoming a publicly traded company in late 2020, QuantumScape announced that it aims to introduce its first batteries to market by 2024. However, after failing to meet that timeline, QuantumScape revised its projections to 2026.  

The delay hurt investors’ sentiment, and QS stock fell from its record high of $131.67 on Dec. 22, 2020, to a record low of $3.40 on April 8, 2025. Nonetheless, the stock has bounced back and surged over 220% in the past month. So, what caused the sudden rise in QuantumScape’s share price?  

First, QuantumScape’s successful integration of its Cobra separator process into standard cell production in late June boosted its stock. Cobra marks a crucial step toward commercialization, allowing for faster and more energy-efficient manufacturing.  

The Cobra separator process is much quicker than the earlier Raptor system, being 25 times more efficient. It offers a more compact and cost-effective solution for producing solid-state battery separators. Cobra takes up a smaller area on the floor compared to the earlier model and is designed for producing batteries on a large scale. Its advantages improve the economic feasibility of mass production.  

Second, QuantumScape’s move away from its costly plan to produce batteries in its factories toward a more affordable licensing approach boosted its shares. This new strategy involves licensing its technology to other automakers, enabling it to earn more profitable fees.  

Finally, the company’s plan to generate revenues through initial field tests in 2026 increased investor confidence. Moreover, QuantumScape is optimistic about its future as it expects revenues to grow from its partnership with Volkswagen’s battery division, PowerCo, and a new manufacturing collaboration with Murata to improve the production of the ceramic film used in its separators. 

Reasons to Be Bullish on NVIDIA Stock 

NVIDIA's market capitalization surged to $4 trillion in a short time, surpassing other tech giants like Apple Inc. (AAPL - Free Report) and Microsoft Corporation (MSFT - Free Report) . The company's dominance in AI fueled its recent stock gains, and it reported $44.1 billion in revenues for the first quarter of its fiscal year, reflecting a 69% increase from the previous year. Most of the revenues came from the data center segment, driven by increased demand from cloud providers expanding AI infrastructure. 

NVIDIA posted a net income of $18.8 billion for the quarter, up 26% year over year. Despite U.S. restrictions on H20 chip exports to China, the company’s financial health remained strong. However, recent willingness by U.S. officials to resume H20 sales in China could boost NVIDIA’s future quarterly results. The rising demand for NVIDIA’s CUDA software platform among developers and the popularity of its Blackwell chips among customers are expected to improve its financial performance and push its stock price higher. 

Which Stock, QuantumScape or NVIDIA, is the Better Investment Now?  

QuantumScape’s shares have strengthened of late as it started the initial production for its next-generation Cobra separator technology. The company’s first-mover advantage in the budding solid-state battery market should encourage stakeholders to retain their shares. 

However, QuantumScape is considered a speculative investment due to the difficulty in assessing its worth, as its products have not yet been brought to market. Moreover, QuantumScape is experiencing a net loss. It has a negative return on equity (ROE) of 41.4% compared to the Automotive - Original Equipment industry’s 6.5%. Hence, new investors may buy the stock at their own risk.  

Zacks Investment Research

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As for NVIDIA, demand for Blackwell chips, AI graphic processing units (GPUs), and CUDA software should drive growth across the cloud and other sectors, prompting shareholders to hold on to the stock. NVIDIA’s solid $53.7 billion in cash and marketable securities in its latest quarter, and management’s preference for buying back shares, is likely to attract more interest from shareholders. 

But NVIDIA is no longer as attractive a bargain as it was earlier, with its price-to-earnings (P/E) ratio now at 39.22 times forward earnings compared to its peer group’s forward earnings multiple of 27.31. Therefore, new investors should wait for a significant pullback before investing in the stock. 

Zacks Investment Research

Image Source: Zacks Investment Research

For now, both QuantumScape and NVIDIA have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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