Fans and followers of Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG) have seen the company come up with some pretty clever and marketable ideas over the years. Being sure to own the world’s most popular smartphone operating system — Android — was a savvy move. And, though it hardly pioneered the premise, Alphabet’s work in self-driving vehicles is arguably going to go somewhere, taking GOOGL stock along with it.
As far as cutting-edge science goes, though, Alphabet stock owners haven’t exactly seen that kind of innovation from the company. That’s about to change. Alphabet is now on the verge of commercializing a whole new kind of computer that’s exponentially faster than the silicon-based binary CPU serving as the brain of the computer you’re likely using to read this.
Quantum Computing
Put the term “quantum computing” in your lexicon, because we’re going to be hearing a lot more about it in the very near future.
It wasn’t all that long ago that quantum computing was a mere theory. In simplest terms, in contrast with the commonly used binary system ultimately based on 1s or zeros that serves as the foundation of all previous electronic computations, quantum computing is a way of utilizing those 1s and zeroes simultaneously, as well as all making use of all points in between. The theory is that such use of an almost-physics-defying will allow a CPU to perform a massive number of simultaneous calculations that are presently impossible due to the either or/limitations of a binary system.
Such a platform raises several questions, the most common of which is, could we reasonably utilize such a supercomputer? The answer is a resounding “yes.”
Obviously this kind of technology would be overkill for something as simple as surfing the web or playing a casual computer game. But the technology is perfectly suited for tasks like genome sequencing, drug discovery or the development of true artificial intelligence, however, turning a computing job that would normally take hours to complete into a task that can be computed in a matter of seconds.
Ready or Not, Here it Comes
Alphabet isn’t the first to reach the quantum computing commercialization finish line. International Business Machines Corp. (NYSE:IBM) did it earlier this year, providing an API and a developer’s kit to tap into the cloud-based version of its solution.
Alphabet’s answer is arguably going to be a more formidable player though, and soon, if a recent company presentation is any indication. As it turns out, Alphabet has already invited some software developers to play with the tool. No revenue-generating app has been developed yet (for Alphabet or for those coders with access to the supercomputer), but that’s more a function of its newness than a matter of functionality — programmers have never had access to a machine as potent as this one, which requires a whole new mindset to explore.
Interest in, and support for, the potential is strong though. Case in point: Softbank. The investment fund, which is also the majority owner of Sprint Corp (NYSE:S), has earmarked $100 billion to invest in a company — or companies — that are best positioned to lead the quantum computing charge.
As of the latest look, that money has yet to be used to make such an investment, and it’s unlikely to be Alphabet that gets the nod. Then again, Alphabet doesn’t need the money. Alphabet needs users, and Softbank’s $100 billion is enough to put several into motion.
In other words, it’s coming, even if nobody knows from which direction, or who will be leading the charge.
Looking Ahead for GOOGL Stock
As for the measurable impact that the advent of quantum computing may make on the value of GOOGL stock, don’t look for fireworks and don’t look for them anytime soon. This sliver of the computer-processing market is still in its infancy and nobody knows what the future holds. That’s why there aren’t even any market-size guesstimates floating around.
For perspective though, the cloud computing market is expected to exceed $160 billion by 2020, while the artificial intelligence market is projected to be worth nearly $60 billion by 2025. For the time being, Alphabet’s spin on quantum computing lies in the significant overlap of those two businesses. That’s a sizable opportunity for a company that’s already got a big name to leverage.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
