Quantum computing stocks rise as Microsoft's new chip heats up debate over technology

Quantum computing stocks advanced on Thursday after Microsoft launched a new chip that indicated the technology is not "decades away" as stated by the top boss of AI chip bellwether Nvidia.

Microsoft unveiled its Majorana 1 chip on Wednesday and said it is less prone to errors than rivals, while providing evidence in a scientific paper set to be published in academic journal Nature.

Quantum computing holds the promise of carrying out calculations that would take today's systems millions of years. If successful the technology could also potentially disrupt today's cybersecurity systems.

Shares of IonQ gained 2.1%, Rigetti Computing rose 6.9% and D-Wave Quantum advanced 11.1%, while those of smaller peers Quantum Corp added 2.6% and Quantum Computing climbed 4.5%.

Shares of Microsoft edged up 0.5%, while Nvidia inched up 0.3%.

When quantum computers will arrive has become a topic of debate in the upper echelons of the tech industry. Microsoft along with Alphabet and IBM are in a growing camp of companies that believe the technology's practical use is nearer than previously imagined.

Quantum computing stocks took a hit in early January when Nvidia CEO Jensen Huang said the technology was two decades away from overtaking his company's chips, which are the workhorses of artificial intelligence.

The stocks logged monthly losses in January, ending a year-long rally that saw them outperform the tech-focused Nasdaq, as well as Nvidia and Microsoft.

They have lost between 18% and 70% so far this year, compared with last year when they had risen at least three-fold.   

(Reporting by Johann M Cherian in Bengaluru; Editing by Arun Koyyur)