Can the Rally in Alphabet (GOOGL) Stock Continue with New Quantum Computing Chip?

Roaring to new 52-week highs, Alphabet's GOOGL stock has made headlines this week following the announcement of its new state-of-the-art quantum computing chip.Known as Willow, the chip is geared to crack a key challenge in quantum error correction pursued in the computing field for almost 30 years. Furthermore, Willow is light years ahead regarding performance across several metrics and standard benchmark computation. Willow has Pushed GOOGL Toward $200 a share Alphabet’s stock has edged toward $200 a share in a move that largely mirrors its Magnificent 7 big tech peer Amazon AMZN. Notably, Amazon shares have soared past $200 after announcing an updated version of its super AI chip Rainer last week which has delivered a supercomputer with a foundational AI model.Similarly, Willow has lit a spark in Alphabet’s stock which had recently broke above its 50-day and 200-day Simple Moving Averages (SMAs) that were in the $160 a share range. Setting up a bullish pattern of its own, Alphabet’s stock has soared +16% in December and is sitting on +40% gains for the year. Year to date, this has trailed Amazon’s +50% but has impressively topped the broader indexes.Image Source: Zacks Investment Research Why Willow is so Significant Designed to significantly reduce errors when it scales up, Alphabet stated Willow performed a computation in under five minutes that would take a supercomputer 10 septillion years to complete. This breakthrough is seen as a step towards commercially relevant quantum computers that can revolutionize fields like medicine, energy, and AI capabilities.   Monitoring Alphabet’s ValuationWith Alphabet sparking the interest of technical traders what may appeal to investors is that GOOGL trades at 23X forward earnings. Offering a slight discount to the benchmark S&P 500, GOOGL has the cheapest P/E valuation of its Mag 7 peers as the next closest is Meta Platforms META at 27.3X with Amazon at 43.3X.Image Source: Zacks Investment Research Final Thoughts Like most of its Mag 7 peers, Alphabet is expecting double-digit top and bottom-line growth in the coming years with Willow being a potential catalyst for its expansion and market dominance. However, after such an extensive rally, Alphabet’s stock currently lands a Zacks Rank #3 (Hold). That said, a buy rating and higher highs could be on the way thanks to a trend of positive earnings estimate revisions (EPS) for fiscal 2024 and FY25.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alphabet Inc. (GOOGL): Free Stock Analysis Report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks