As the Chairman and CEO of Microsoft Corp. MSFT, Satya Nadella announced the world's first-of-a-kind quantum chip – Majorana 1, quantum computing stocks jumped with the euphoria surrounding the discovery.
What Happened: Even as skeptics raised questions on the usage of the word "breakthrough," Nadella in a podcast with Dwarkesh Patel reiterated that this was a "physics and fabrication breakthrough" and not a "quantum computing breakthrough".
Describing a new phase of matter that was used to conduct information in the new chip, Nadella in an X post said, "We've created an entirely new state of matter, unlocked by a new class of materials, topoconductors, that enable a fundamental leap in computing."
He termed this discovery as the "the transistor moment of quantum computing," in the podcast.
Following this, the quantum computing stocks edged higher on Wednesday. The stocks were also trading higher in the premarket on Thursday. On a year-to-date basis, these stocks had underperformed the benchmarks.
| Stocks | Wednesday’s Performance | Thursday’s Pre-Market Performance | YTD Performance |
| Rigetti Computing Inc RGTI | 4.58% | 11.06% | -44.85% |
| Quantum Computing Inc QUBT | 7.86% | 9.80% | -57.57% |
| D-Wave Quantum Inc QBTS | 8.28% | 9.48% | -31.95% |
| IonQ Inc IONQ | 0.59% | 4.51% | -20.79% |
| Defiance Quantum ETF QTUM | 0.18% | 0.73% | 3.57% |
Why It Matters: Investor and businessman Martin Shkreli criticized IonQ and Rigetti Computing’s stock valuations, claiming quantum computing isn’t commercially viable.
He suggested Microsoft’s new ‘Majorana 1' chip, despite its “breakthrough” claims, could hurt its market positions. Shkreli also alleged attempts to suppress the publication of Microsoft’s quantum research.
Alphabet Inc. GOOG GOOGL backed Google’s Willow chip which was announced on Dec. 9, 2024. It achieved a quantum memory milestone, solving a problem in minutes that would take a supercomputer longer than the universe’s age. Despite this, high error rates still limited its practical quantum memory applications.
Nadella, on the other hand, in the conversation with Patel also said "We have also got some fantastic breakthroughs on error correction."
Price Action: MSFT rose 1.25% on Wednesday, contrasting with a slight 0.028% uptick in the Invesco QQQ Trust, Series 1 QQQ, which tracks the Nasdaq 100 index.
In premarket on Thursday, it was up 0.38% whereas QQQ was down 0.20%. MSFT remains 0.91% lower on a year-to-date basis and only 2.97% up over the year.
Benzinga tracks 31 analysts with an average price target of $509.23 for the stock, reflecting a “buy” rating. Estimates range widely from $425 to $600. Recent ratings from UBS, DA Davidson, and RBC Capital average $478.33, suggesting a potential 14.80% upside.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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