Microsoft Just Delivered Fantastic Quantum Computing News to Investors. Is the Stock a Buy? – The Motley Fool
Source: Motley Fool
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Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, personal finance education, top-rated podcasts, and non-profit The Motley Fool Foundation.
Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.
Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, personal finance education, top-rated podcasts, and non-profit The Motley Fool Foundation.
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Artificial intelligence (AI) has been a popular investing theme in recent quarters as the technology promises to help businesses gain in efficiency — and even develop game-changing products and services. The world’s top tech companies have invested in this area, and investors have piled into these stocks to share in the potential gains. Today’s $200 billion AI market is forecast to reach $1 trillion by the end of the decade, making it a high-growth opportunity.
But AI isn’t the only newish technology offering companies and investors the potential for enormous gains down the road. Another complementary technology also has been generating excitement — and if it reaches its goals it could result in enormous gains for those who invested early. I’m talking about quantum computing, a technology relying on quantum mechanics to tackle problems that are impossible to solve today. The quantum computing market may add more than $1 trillion to the global economy between this year and 2035, according to at least one source.
Companies large and small have been working in the space. Certain players, like Rigetti Computing, for example, are pure plays, specializing in quantum computing. Others, like Microsoft (MSFT -1.03%) and Alphabet, are technology giants that have added quantum computing to their repertoires. And speaking of Microsoft, the software powerhouse just delivered fantastic quantum computing news to investors. Does this make the stock a top quantum computing buy?
As mentioned, many companies are working on quantum computers and related tools. A quantum computer operates differently than a classical computer, and that will eventually allow it to solve a problem in just a few minutes that would take a classical computer thousands of years. Applying quantum mechanics — or the study of how subatomic particles interact — quantum computers use qubits to accomplish complex calculations.
Like the classical computer’s bits that process data, qubits process data too, but they can scale exponentially.
Now, let’s consider the Microsoft news. The technology giant this week announced a new chip that it says will make useful quantum computers a reality “in years, not decades.” This is huge news considering experts have said for quite some time that this goal remains far off. For example, Nvidia CEO Jensen Huang back in January said useful quantum computers probably are about 20 years away. Huang’s comments sent stocks that focus uniquely on this technology tumbling.
So, if Microsoft is right, this could be a game-changing development. The tech powerhouse introduced Majorana 1, a quantum chip powered by a new type of material: the topoconductor. This material creates a completely new type of matter — not a solid, liquid, or gas. And Microsoft said this is used to produce a qubit that’s stable, fast, and small in size. The company so far has put eight of these on a chip that can potentially scale to 1 million.
“Whatever you’re doing in the quantum space needs to have a path to a million qubits,” Chetan Nayak, a Microsoft technical fellow, said in a post on the Microsoft website. “If it doesn’t, you’re going to hit a wall before you get to the scale at which you can solve the really important problems that motivate us.”
So, Microsoft is on the way to scaling its chip, and its bet
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