Shares of Alphabet, Google’s parent company, rose about 5% on Tuesday following the announcement of its new quantum computing chip, Willow, which the company says overcomes a major hurdle in the field. Unveiled on Monday, Willow reportedly solved a complex problem in five minutes that would take a classical computer longer than the age of the universe to compute.

Quantum computing promises speeds far exceeding traditional silicon-based computers but has been hindered by error-prone "qubits," the building blocks of quantum computers. Alphabet announced that the Willow chip reduces error rates as the number of qubits increases and can correct errors in real time, addressing a critical challenge in the technology's development. Thomas Hayes of Great Hill Capital highlighted Willow’s potential for breakthroughs in science, medicine, and finance, despite the lack of immediate applications.

Alphabet’s stock performance marks its best day since late April and reflects a 25% increase this year. Its shares trade at a 12-month forward price-to-earnings ratio of 19.58, compared to competitors like Microsoft at 32.03 and Amazon at 36.79, according to LSEG data. Alphabet’s advancements come as rivals like Microsoft and Quantinuum also make strides in making quantum computing commercially viable, signaling increased competition in this transformative technology space.