Microsoft introduced a new quantum chip on Wednesday, claiming it is 1,000 times more reliable than the previous version. However, investors remained unconvinced. The stock dropped 3.3% that day, adding to a decline of over 4% from the day before. The announcement did little to address ongoing doubts about Microsoft’s credibility in quantum computing, and most analysts agree that quantum technology is still years away from affecting the company’s profits. In reality, the immediate focus for Microsoft’s stock is artificial intelligence, not quantum computing.
Microsoft showed off the newest version of its Majorana quantum processor, which was redesigned using artificial intelligence. The company says these changes could cut its timeline to build a scalable quantum computer in half, putting it on pace with competitors like IBM, which aims for a fault-tolerant quantum supercomputer by 2029. However, Microsoft’s latest performance claims have not been peer-reviewed, which is important given its past issues. In 2021, Microsoft had to retract a major peer-reviewed paper after outside researchers found it left out key raw data. The following announcement of the Majorana 1 chip also faced questions from scientists.
From an investment standpoint, KeyBanc described the quantum effort as a longer-term growth focus, a characterization that suggests the market should not expect meaningful near-term financial contribution. Microsoft sells access to third-party quantum hardware through its Azure Quantum platform but does not yet have its own commercial quantum machines. A computer built in partnership with privately held Atom Computing is expected to come online later this year.
More relevant in the short term was news from Microsoft’s Build developer conference. The company introduced seven new AI models, including MAI-Thinking-1, its first reasoning model built at a lower token cost using its own Maia 200 chips. KeyBanc had a positive view of Microsoft’s approach to designing its own chips, as the company aims to lower costs and compete with Amazon’s Trainium and Google’s TPU chips.
Microsoft’s stock has risen almost 20% since early April, but it is still down 12% in 2026. Investors are not yet convinced that this recovery will last, and quantum computing is not expected to be the factor that changes their minds.
