Alphabet Climbs Following Breakthrough With Willow Quantum Chip

(Bloomberg) — Alphabet Inc. shares jumped the most since October as analysts applauded the Google parent’s announcement Monday of a major development in quantum computing through the use of its Willow quantum chip.

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The stock gained as much as 6.3% and traded at the highest since July. Alphabet has lagged behind most of the Magnificent 7, but Tuesday’s surge added to a catchup rally that has boosted the shares almost 25% off a September low.

The company’s quantum computer needs just five minutes to solve a problem that would take supercomputers around 10 septillion years, Alphabet announced Monday, though it did not disclose any actual uses for all that theoretical power.

That didn’t stop analysts from taking a bullish view of the development, with many singling out Willow as a potential long-term catalyst.

“While quantum is still years from broad commercial adoption,” the breakthrough “reinforces Google’s technology leadership,” wrote Colin Sebastian, an analyst at Baird who has an outperform rating on the stock. “Willow marks an important step toward the eventual commercialization of quantum computing — something that could have significant implications for many industries, as well as data and national security.”

Bloomberg Intelligence wrote that quantum advancements are “likely to aid with both AI training and inferencing” at Alphabet, while the company’s chip advantage is “likely to expand versus other large tech companies.”

Other quantum-related stocks also moved in the wake of Alphabet’s announcement. Rigetti Computing Inc. jumped as much as 29% on Tuesday while D-Wave Quantum Inc. rose 16% before paring much of that advance; it last traded up 6.7%. IonQ Inc. rose 5.4%.

The group has been on a tear of late. IonQ is up more than 400% off a September low, as is D-Wave, while Rigetti has soared more than 600% off a September low of its own.

Options traders also took notice of the rally in Alphabet shares. More than 400,000 call options on the stock changed hands as of 10:23 a.m. in New York, almost five times more than the put contracts, data compiled by Bloomberg show. Less than an hour into the open, the volume of options that bet on further gains in the stock was 2.4 times higher than its full-day average in the past 20 days.

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