Alphabet Stock Jumps on Google's Quantum Computing Chip

An outside view of Google headquarters in Mountain View, California — (Image credit: Tayfun Coskun/Anadolu via Getty Images)

Shares of Google's parent company Alphabet (GOOGL) are higher Tuesday after the tech giant introduced Willow, its latest quantum chip.

The Willow chip can reduce errors as it scales and performs a computation in under five minutes, said Google Quantum AI founder and lead Hartmut Neven in a blog post. He added that the same computation would take one of the world's fastest supercomputers 10 septillion years to complete.

"The Willow chip is a major step on a journey that began over 10 years ago," Neven said. "As part of Google Research, our team has charted a long-term roadmap, and Willow moves us significantly along that path towards commercially relevant applications."

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Regarding the speed of the chip's computing ability, Neven said, "This mind-boggling number exceeds known timescales in physics and vastly exceeds the age of the universe."

Over the long term, Neven believes quantum computation will advance the ability of artificial intelligence, including discovering new medicines and designing more efficient batteries for electric vehicles.

Is Alphabet stock a buy, sell or hold?

Alphabet has outperformed the broader market in 2024, up 36% for the year to date on a total return basis (price change plus dividend) vs the S&P 500's 33% gain. This is just more of the same for GOOGL, which has been a market-beating machine for the past two decades. And even with Google's looming legal issues, Wall Street is bullish on the Magnificent 7 stock.

According to S&P Global Market Intelligence, the average analyst target price for GOOGL stock is $209.85, representing implied upside of more than 14% to current levels. Additionally, the consensus recommendation is a Buy.

Financial services firm Argus Research has a Buy rating on GOOGL stock with a $200 price target.

"While Alphabet has often been criticized as a Johnny-one-note for its dependence on digital advertising, the rapid growth of Google Cloud has begun to diversify the company's revenue," wrote Argus analyst Joseph Bonner in an October 31 note. "Even the much maligned Waymo autonomous vehicle business has begun to expand commercial services, well ahead of competitors. Alphabet remains at a minimum competitive, if not a leader, in the development of generative AI, perhaps the new computing paradigm."

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.