The market expects Google parent company Alphabet's stock price to end the entire trading year 2024 at a high. Although recent breakthroughs in quantum computing have not yet shown commercial potential, they still stimulated the stock price increase by the end of the year.

Alphabet's stock price has risen more than 30% from its September low, with most of the increase occurring after the news of its successful development of the quantum computing chip Willow. At a time when there were concerns that Alphabet might fall behind competitors in the AI field, like OpenAI, and worries about antitrust risks, quantum computing became a positive driving force, helping Alphabet to regain its status as a giant stock that outperformed its peers. Currently, the stock is among the top 20 best performers in the NASDAQ 100 Index this year.

"Market sentiment has been low as people began to view Alphabet as a traditional company that has taken the wrong side of significant progress, but this dynamic indicates it hasn’t lost its magic," said Michael Smith, senior portfolio manager at Allspring Global Investments. "This serves as a reminder that Alphabet is a treasure trove of intellectual property and a company closely related to future technology."

The company stated that the algorithms used to test the computing power of quantum computers are not yet in practical use and are unlikely to quickly drive revenue growth. Nevertheless, quantum computers are still considered to have enormous potential, and this breakthrough by Alphabet has led to a surge in the stock prices of other companies researching similar technologies, including Quantum Computing, Rigetti Computing, D-Wave Quantum, and IonQ.

Governments, technology companies, and venture capitalists have invested billions of dollars into quantum computing, whose processing power is millions of times that of conventional computers. Bank of America analysts listed many potential uses for this technology, including drug discovery, advanced materials design, and next-generation encryption solutions.

"Quantum computing innovations have the potential to create an important technological moat for Alphabet," wrote Bank of America analyst Justin Post, although it will take years for commercial applications to emerge, and added that Alphabet's "track record in developing next-generation technologies and successfully monetizing them" is undervalued in the stock's valuation.

Alphabet's stock has a PE of 21 times its expected earnings, lower than the NASDAQ 100 Index's 27 times, also the lowest among the 'Seven Giants.'

Since Google was ruled to have illegally monopolized the search market in August, antitrust risks have posed pressure on the stock. The U.S. Department of Justice proposed a forced sale of the Chrome browser and attempted to terminate its partnership with AI startup Anthropic—these punitive measures are believed to be harsher than expected. Although the ultimate outcome remains uncertain, it is expected that the antitrust chief of president-elect Trump will maintain a tough stance on large technology companies.

However, some investors indicated that the company's valuation has fully reflected the regulatory risks, especially since the company's recent performance highlighted its strong fundamentals beyond this issue.

Hanna Howard, portfolio manager at Gabelli Funds, said, "We will view any stock price fluctuations related to antitrust issues as a Buy opportunity, as it still possesses strong growth prospects," adding that Alphabet is "constantly innovating, and we should start to see returns from its continued investment."

Kevin Walkush, portfolio manager at Jensen Investment Management, is also Bullish on Alphabet because it is a very strong traditional company in the AI field, with quantum computing adding optionality on top of that.

From a valuation perspective, quantum computing is not a "panacea," Walkush said, adding that "quantum computing has significant optionality, but the current probability of success is still very low, thus it is far from being able to drive value growth."