Alphabet Stock Rallies In Premarket As New ‘Willow’ Quantum Chip Wows Traders: Retail Excited

Alphabet, Inc. ($GOOG) ($GOOG) shares rose sharply in Tuesday’s premarket trading as traders reacted to the company’s announcement regarding its latest quantum chip, Willow. 

In a statement released Monday, Google Quantum AI founder and lead Hartmut Neven said the Willow chip performs state-of-the-art across several metrics. 

The quantum chip can reduce errors exponentially and perform a standard benchmark computation in under five minutes, which would take today’s fastest supercomputers about 10 septillion years, he said.

Google said the next challenge is to demonstrate the first “useful, beyond-classical” computation relevant to a real-world application. “Our goal is to do both at the same time — to step into the realm of algorithms that are beyond the reach of classical computers and that are useful for real-world, commercially relevant problems,” it added. 

In a post on X, Alphabet CEO Sundar Pichai said, “We see Willow as an important step in our journey to build a useful quantum computer with practical applications in areas like drug discovery, fusion energy, battery design + more.”

Specifications shared by the company showed that Willow has 105 qubits - the building block of quantum computers. It was developed in a fabrication laboratory that Google built at its quantum-computing campus in Santa Barbara, California, in 2021.

While rivals such as International Business Machines Corp. ($IBM) and Amazon, Inc’s ($AMZN) AWS are also developing quantum chips, Google differentiated itself with its error correction. “The more qubits we use in Willow, the more we reduce errors, and the more quantum the system becomes,” Google said.

GOOGL sentiment and message volume December 10, 2024, premarket as of 8:45 am ET | Source: Stocktwits

Stocktwits users are ‘extremely bullish’ (82/100) on Alphabet stock, a reversal from the ‘bearish’ mood that prevailed a day ago, with message volume spiking to ‘high.’

A user on Stocktwits expressed confidence that Google would dominate quantum computing.

With Elon Musk expressing his amazement at the Willow quantum chip, another user surmised that Tesla could start buying Google chips.

A retailer also raised the possibility of the development taking Alphabet past the $3 trillion market capitalization mark.

Alphabet shares climbed 3.97% to $182.45 as of 8:45 a.m. ET in premarket trading. The stock is up 26% for the year, trading between the $129.69 and $191.75 range.

It was among the top five-trending stocks on Stocktwits early Tuesday.

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