Shares of Rigetti Computing (RGTI +7.89%) 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 (SNPINDEX: ^GSPC) was flat and the Nasdaq Composite (NASDAQINDEX: ^IXIC) 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.
NASDAQ: RGTI
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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.
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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.
