We propose a scheme to realize cubic quantum nondemolition (QND) Hamiltonian with optical parametric interactions. We show that strongly squeezed fundamental and second harmonic fields propagating in a nonlinear medium effectively evolve under a cubic QND Hamiltonian. We highlight the versatility offered by such Hamiltonian for engineering non-Gaussian quantum states, such as Schrödinger cat states and cubic phase states. We show that our scheme can be highly tolerant against overall detection inefficiency with an auxiliary high-gain phase-sensitive optical amplifier. Our proposal involves parametric interactions in a mesoscopic photon-number regime, significantly enhancing the effective nonlinear coupling from the natïve single-photon coupling rate while providing powerful means to fight photon propagation loss. Experimental numbers suggest that our scheme might be feasible in the near future, particularly with pulsed nonlinear nanophotonics.

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