Quantum computing stocks saw gains on Thursday after Microsoft unveiled its new Majorana 1 chip, signaling that the technology
may be closer to practical use than previously thought. This contradicts the stance of Nvidia CEO Jensen Huang, who had stated earlier this year that quantum computing was still decades away.
Microsoft's Majorana 1 chip is designed to be less error-prone than its competitors, a major challenge in quantum computing. The company has backed up its claims with a scientific paper set to be published in Nature, a prestigious academic journal. If successful, quantum computing has the potential to solve complex calculations that would take classical computers millions of years and could disrupt modern cybersecurity systems.
Following Microsoft's announcement, shares of quantum computing companies surged. IonQ (IONQ.N) gained 2.1%, Rigetti Computing (RGTI.O) rose 6.9%, and D-Wave Quantum (QBTS.N) advanced 11.1%. Smaller players Quantum Corp (QMCO.O) and Quantum Computing (QUBT.O) also climbed 2.6% and 4.5%, respectively. Meanwhile, Microsoft (MSFT.O) saw a modest 0.5% increase, and Nvidia (NVDA.O) inched up 0.3%.
The debate over when quantum computing will become commercially viable has intensified in the tech industry. Major players like Microsoft, Alphabet (GOOGL.O), and IBM (IBM.N) are optimistic that the technology's practical use is closer than once believed. However, Nvidia's Huang suggested in January that quantum computing is at least 20 years away from surpassing traditional AI chips, which are currently dominating artificial intelligence workloads.
Quantum computing stocks had a rough start to 2025, with many losing between 18% and 70% year-to-date. This follows a strong 2024 rally, where they outperformed the Nasdaq (.IXIC) as well as Nvidia and Microsoft. However, Microsoft's recent breakthrough could reignite investor interest in the sector.
