Google's parent company, Alphabet, experienced a sharp increase in its stock prices by almost six percent after announcing the launch of a quantum computing chip. The latest chip, called Willow, is said to be capable of solving a problem in five minutes—a task that would take longer than the entire history of the Earth on conventional computers.

For investors, the question now arises concerning the impact on Alphabet's stock. Although the direct effects of quantum computing on the stock remain unclear, this breakthrough could enhance confidence in the company's ability to transform.

Alphabet has already seen a stock price increase of over 35% this year. Nevertheless, the company has faced challenges in recent years. The rise of ChatGPT sparked fears that the Google search engine might become obsolete. In response, Alphabet introduced its own AI solution with Google Gemini. However, it remains uncertain how effectively Gemini will mitigate the potential loss of Google Search users.

While various business segments like Google Cloud have been added, search with ads remains the primary revenue source. This has led to relative underperformance compared to other mega-cap stocks, reflected in the lowest price-to-earnings ratio (P/E ratio) among the "Magnificent Seven" stocks.

In the field of quantum computing, the future appears both promising and uncertain. The exponential acceleration of computing speed is positive, but practical applications are still scarce, suggesting that the technology might be ahead of its demand. The fundamental building blocks, known as qubits, are notorious for their instability. Willow's breakthrough in efficiently stringing qubits together promises fewer errors, potentially positioning Alphabet as a leader—provided the technology finds practical applications.

Not to be overlooked is Alphabet's substantial liquidity reserve of 93 billion dollars, which, despite investments in dividends and technologies, provides ample room for new revenue streams. The free cash flow of 48 billion dollars in the first nine months of 2024 ensures continuous diversification.