Google announces a quantum breakthrough. What does it mean for the future? (12/11/2024)

Hello, everyone! This week, our focus is on Alphabet Inc. $谷歌-A (GOOGL.US)$ , Google’s parent company. In a notable development, Google has introduced a new chip, which they claim represents significant progress in quantum computing—an area seen as the next frontier for many tech giants. In this article, we’ll look at the latest trends and recent market activity for the company.

What’s new?

On Tuesday, December 10, 2024, Alphabet’s stock rose over 5% following the company’s unveiling of “Willow,” a new quantum computing chip described as a “breakthrough”. This innovative processor reportedly solved a complex computational problem within five minutes that would take one of today’s fastest supercomputers 10 septillion years to complete.

Advocates of quantum computing propose that these advanced systems could tackle complex problems beyond classical computers’ reach. Classical computing uses bits, which are binary units of information (either 0 or 1), while quantum computing utilizes quantum bits, or qubits. Qubits can exist in multiple states simultaneously, enabling the processing of much larger data volumes.

Willow presents the second milestone in Google’s six-step plan for developing practical quantum computers. The chip contains approximately 100 qubits, though Google aims to eventually build a system with 1 million qubits.

As quantum computing matures, it’s anticipated to benefit fields like large-scale drug research simulations, financial analysis, and code breaking. However, practical applications may not be possible for years or even decades.

Additionally, Google’s quantum chip uses superconducting qubits that require extremely low temperatures, close to absolute zero. This need presents major technical challenges and could limit the scalability of these systems.

Chart of the day

Trend analysis:

Alphabet’s shares (GOOGL) experienced a notable uptrend since early 2023. The weekly chart indicates a significant increase of over 120% as of December 11, 2024.

Looking at the daily chart, we can see what seems to be an inverse head and shoulders pattern that formed during a recent price correction. This technical formation, with its neckline around $169, could potentially indicate further upward movement as it seems to have completed.

Technical indicators:

● GOOGL’s key moving averages (MAs) currently display a bullish configuration, with the shorter-term MAs positioned above their longer-term counterparts. This alignment typically suggests upward momentum and might indicate the potential for continued positive price movement.

● The MACD indicator currently trades above the zero line, signaling positive market sentiment. However, as the price reached a new record high, the MACD was unable to surpass its previous peak, indicating a bearish divergence. This divergence between price action and the indicator could suggest a possible price consolidation or correction in the short term.

● The RSI indicator currently indicates an overbought condition, with the reading surpassing the 70 threshold. This elevated RSI level suggests the strength of the current uptrend and reflects significant buying pressure. However, traders should note that while overbought conditions often signal a strong trend, they can also precede potential price corrections or consolidations.

● A notable price gap occurred on December 10, coinciding with the announcement of Google’s new quantum computing chip. This upward movement in share price might reflect increased trading interest following the news.

In conclusion, GOOGL’s long-term trend remains a bullish trajectory. The recent gap-up breakout, followed by a new record high, suggests renewed upside momentum for the stock. However, prudent traders should be aware that the price might have advanced rapidly in the short term, as several technical indicators point to potential overbought conditions and bearish divergences. These signals could suggest a possible price consolidation or correction in the near future. Traders may closely monitor the area around the recent gap for potential support, as this level could be significant in case of a pullback or consolidation.

This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve.

All investment involves risk, including the potential loss of principal, and there can be no guarantee that any investment strategy will be successful.