Bank of America said Alphabet’s new Willow quantum chip is an important computing milestone that highlights the company’s ability to innovate. Analyst Justin Post reiterated his buy rating and $210 stock price target in a report on Tuesday. Alphabet has a “long history of innovation but is undervalued,” the analyst said. Alphabet shares rose nearly 4% on Wednesday, leading the market higher. Shares rose 5.6% after the news was announced on Tuesday. The stock has gained about 38% so far this year. GOOGL 1D mountain Alphabet stock Wednesday In a company announcement on Monday, Google said it had managed to significantly reduce error rates as it added units of calculation, known as qubits. Typically, when you add more qubits, errors increase due to noise, but Google has successfully demonstrated that Willow can reduce errors when increasing the number of qubits, according to the technology company. “This solves a key challenge in quantum error correction that the field has been pursuing for nearly 30 years,” Google said in its blog post. The company said the Willow quantum chip also operates much faster than existing technology. Quantum computing still has no practical applications and has yet to be commercialized. However, “quantum innovation has the potential to create a significant technological moat for Alphabet in the long term,” Post said. The analyst added: “Willow’s progress shows that Alphabet remains at the forefront of technological innovation, which is important for stock market sentiment.” — CNBC’s Michael Bloom contributed to this report.
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