Reports have hit the market that Google's parent company Alphabet Inc. (GOOG, Financial) (GOOGL, Financial) plans to spin off its top-secret quantum technology group, Sandbox, into its own company, sending the message to investors that the future is now. Sandbox was founded by Google cofounder Sergey Brin and is currently headed by Jack Hidary.
“Separate from Google's quantum computing team in Santa Barbara, Sandbox focuses on software and more experimental quantum projects. It sits within Google's moonshot incubator, known as X, although it considers itself an independent unit,” businessinsider.com reported. “Hidary now plans to spin out Sandbox into a separate company, according to two people familiar with the matter.”
The Mountain View, California-based conglomerate is “getting serious about spooky action at a distance,” quipped thenextweb.com in breaking the news. “Alphabet’s reportedly planning to promote one of its Moonshot projects from venture to business in a bid to take advantage of its recent breakthroughs in the field of quantum computing. It was only a matter of time. Time crystals, that is.”
A host of nations around the globe have poured more than an estimated $25 billion into quantum research and development in an attempt to monetize quantum computing as an everyday tool for business. According to cxotoday.com, “Alphabet has built a 54-qubit processor Sycamore and demonstrated its quantum supremacy by performing a task of generating a random number in 200 seconds, which it claims would take the most advanced supercomputer 10,000 years to finish the task. The company also unveiled its newest 72-qubit quantum computer Bristlecone.”
Whether it’s quantum or any other kind of computing, Wall Street regulars want more of what Alphabet is offering. Shares of the company leaped by 65.3% in 2021, which is almost three times the 22.2% rise recorded by the Nasdaq Composite index.
In Monday’s trading, shares of Alphabet crossed into oversold territory, hitting a relative strength index (RSI) reading of 29.6, after changing hands as low as $2,662.81 per share. An analysis from the Nasdaq website claims, “By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 40.7. A bullish investor could look at GOOG's 29.6 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.”
Zacks Equity Research suggested that the company’s commanding presence in the search market, supported by a growing cloud footprint and activity in the smart home market, are behind its stock’s noticeably strong outing.
Alphabet has undoubtedly been aided by the Covid-19 pandemic, which saw Americans turning to the internet in record numbers. Revenue for the first three quarters of last year rose 45.1% year-over-year to $182.3 billion. Net income spiked by 121.2% for the same period, cresting at $55.4 billion. Free cash flow also jumped to $48.5 billion, up from $25.6 billion the year before.
In addition to Google, the company also owns YouTube, a popular video-sharing site, as well as a cloud service called Google Cloud and many other smaller subsidiaries like Sandbox. The company has said its strategy going forward includes expanding internationally in Chile, Israel, Germany and Saudi Arabia. Google Cloud is also looking to expand, though it is still growing within its home market in the United States, with goals to gain more market presence in Columbus, Ohio and Dallas, Texas.
