What Happened?
Shares of online advertising giant Alphabet (NASDAQ:GOOGL) jumped 5.4% in the morning session after the company shared progress in quantum computing by unveiling its new quantum chip, Willow, which solves more complex problems while maintaining accuracy. Using Random Circuit Sampling (RCS)—a rigorous test for evaluating a quantum computer's ability to solve difficult tasks—GOOGL demonstrated that its quantum machines outperform traditional supercomputers, even when dealing with noise and interference. The stock's reaction suggests investors are optimistic about the potential these advancements hold not just from a technological standpoint but from a business perspective as well.
After the initial pop the shares cooled down to $183.29, up 4.5% from previous close.
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What The Market Is Telling Us
Alphabet’s shares are quite volatile and have had 19 moves greater than 2.5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 19 days ago when the stock dropped 6.5% on the news that the Department of Justice proposed changes to limit Google's control over online search and ads, following a court ruling that found the company (GOOGL) unfairly blocked competition for over a decade. The ruling includes recommendations for Google to sell key assets like Chrome and, potentially, Android to reduce its market dominance. Market reactions indicate that investors are anticipating these changes, recognizing the critical role the assets affected by the proposal play in Google's growth strategy.
Alphabet is up 32.7% since the beginning of the year, and at $183.29 per share, it is trading close to its 52-week high of $191.18 from July 2024. Investors who bought $1,000 worth of Alphabet’s shares 5 years ago would now be looking at an investment worth $2,730.
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