Alphabet 's new Willow quantum chip is a major computing milestone that underscores the company's power in innovation, according to Bank of America. Analyst Justin Post reiterated his buy rating and $210 price target on shares in a Tuesday note. According to the analyst, Alphabet has a "long history of innovation [and is] underappreciated in valuation." Shares of Alphabet rose nearly 4% Wednesday, leading the market higher. This follows Tuesday's gains of 5.6% on the announcement. Year to date, the stock is up around 38%. GOOGL 1D mountain Alphabet shares on Wednesday In the company's announcement on Monday, Google said it has managed to significantly reduce the rate of error when increasing units of computation, known as qubits. Typically, errors increase due to noise when adding more qubits, but Google has managed to show Willow can decrease errors when raising the number of qubits, according to the tech company. "This cracks a key challenge in quantum error correction that the field has pursued for almost 30 years," Google said in its blog post. The Willow quantum chip is also able to compute at much faster rates than existing technology, the company said. Quantum computing still has no real-world applications and is not yet commercially viable. However, "over the long term, quantum innovation has the potential to create a significant tech moat for Alphabet," Post said. "Advancements with Willow, which illustrate that Alphabet remains at the leading edge of technology innovation, are important for stock sentiment," the analyst added. — CNBC's Michael Bloom contributed to this report.
