Alphabet's Shares Surge 12% in January: Unpacking the Reasons
Alphabet's shares soared last month following its unveiling of a groundbreaking quantum chip, dubbed Willow. This leap in quantum computing technology, showcased by the new chip, sent a ripple through the tech sector and boosted shares in other quantum computing companies as well.
The announcement of Willow's achievements, including reducing errors exponentially with the increase in qubits and completing a task in minutes that would take a top supercomputer 10 septillion years, signified Alphabet's position at the forefront of the AI race.
Google's new quantum chip had managed to scale error correction effectively, and its capability of completing a benchmark task swiftly, slammed the brakes on the ongoing debate about quantum computers' practical applications. The company's blog post on the matter highlighted the promising future of large-scale quantum algorithms that can deliver results rapidly.
This breakthrough in quantum computing sparked a surge in the share prices of companies such as Rigetti Computing, Quantum Computing, and D-Wave Quantum. The gains for Alphabet itself were significant, finishing the month up by 12%. The majority of these gains were credited to the Willow announcement on Dec. 9.
Previously, Alphabet had faced criticism after the initial presentation of its first generative AI chatbot, Bard, which made inaccuracies during its first showcase. However, the company swiftly addressed this setback by replacing Bard with Gemini and incorporating an AI assistant in Google searches to retain user engagement within its ecosystem. The venture has continued to thrive, backed by steady revenue and profit growth.
Though quantum computing may not produce immediate business results for Alphabet, the potential it showcases reassures investors of the tech giant's forward-thinking approach. This forward-thinking mentality is crucial as the company chases after technological advancements and continually sustains its status as one of the top tech giants.
The surge in Alphabet's shares can be attributed in part to the potential of its quantum computing technology, making it an attractive investment opportunity for many. With the successful scaling of error correction in Willow, the company is poised to make significant strides in finance, potentially revolutionizing the way money is managed and investments are made.
