Shares of Rigetti Computing (RGTI -2.28%) are jumping on Thursday. The quantum computing start-up's stock rose 4.8% as of 3:30 p.m. ET, but was up as much as 12.6% earlier in the day. The rise comes as the S&P 500 (^GSPC -1.29%) was flat and the Nasdaq Composite (^IXIC -1.72%) rose 0.2%.
Rigetti and other quantum stocks saw a boost after Microsoft's earnings call, in which the tech giant's CEO called out quantum computing as "the next big accelerator" in cloud computing.
Microsoft sees quantum computing in its future
Microsoft's recent earnings -- which showed strong growth and an incredible increase in the company's artificial intelligence (AI) capital expenditures -- included a nod to its efforts in quantum computing. During the company's call, CEO Satya Nadella spoke of the technology as an exciting opportunity in the future, adding that it had a technological breakthrough in partnership with Atom Computing.
Image source: Getty Images.
Nadella was optimistic, saying:
The next big accelerator in the cloud will be quantum, and I'm excited about our progress. In fact, earlier this month, we announced the world's first operational deployment of a Level Two quantum computer in partnership with Atom Computing. This is how we will continue to think and make investments with decade-long arcs while making progress every quarter.
Investors should keep an eye on timelines
While this is positive news, the details were fairly light, and his "decade-long arcs" comment should make investors pause. I think that we are many, many years, if not decades, away from viable quantum computing, yet Rigetti and other quantum computing companies are reaching multibillion-dollar valuations already. I think there is a disconnect here, and investors should be realistic about the possibility that this technology is a long way from maturity and commercial viability.
