Microsoft said it had reached a milestone in its quantum- computing journey, delivering a boost to shares of quantum pure plays such as D-Wave Quantum and Rigetti Computing on Thursday.

The tech behemoth unveiled its Majorana 1 chip on Wednesday afternoon, claiming it was one step closer to building quantum computers "capable of solving meaningful, industrial-scale problems."

D-Wave Quantum and SEALSQ saw the biggest gains, rising 13% and 10.36%, respectively. Rigetti Computing was up 4%, Quantum Computing was up 3.6%.

Microsoft said the latest development marked a turning point after 17 years of research as the company progressed "from scientific exploration to technological innovation."

Majorana 1 is a quantum processing unit, or QPU, often referred to as the brain of a quantum computer. A QPU harnesses quantum mechanics to perform calculations, relying on particles like electrons or photons that can exist in multiple states at once.

A QPU can be likened to a central processing unit in classical computing, while quantum bits, or qubits, are the basic units of information in quantum systems, analogous to traditional bits. Microsoft said it had engineered a "radically different type of qubit" called a topological qubit, describing it as "small, fast, and digitally controlled."

IBM aims to deploy a "quantum-centric supercomputer" with 100,000 qubits by 2033, but Microsoft may outstrip it. The architecture used by Majorana 1 "offers a clear path to fit a million qubits on a single chip that can fit in the palm of one's hand," the company said.

The Majorana 1 chip, part of a continuing research effort, isn't available commercially. Microsoft published its latest results in the journal Nature on Wednesday.

Proponents argue that quantum computing will lead to breakthroughs in fields like pharmaceuticals and cybersecurity, optimize supply chains in minutes rather than hours, and make it possible to train even more powerful artificial intelligence models.

People buying shares in quantum computing companies could be positioning themselves to benefit from transformative technology, but the stocks are risky. The companies have a large base of retail investors who tend to trade in response to news, making the shares volatile.

There is also the argument that quantum companies are far from producing systems with mainstream applications, according to tech leaders such as Nvidia CEO Jensen Huang. Huang said last month, in response to a flurry of enthusiasm over quantum computing, that it could take 20 years for so-called useful quantum to arrive.

His comments were echoed by Meta Platforms CEO Mark Zuckerberg, who said quantum computing was "quite a ways off from being a truly practical paradigm."

D-Wave Quantum has pushed back on this argument. In an interview with Barron's last week, CEO Alan Baratz pointed out that the company became commercial in 2011 after selling its first computer to Lockheed Martin.

The company reached yet another milestone on Feb. 13 when it closed a deal with a German research institute. The Jülich Supercomputing Centre at Forschungszentrum Jülich became the world's first high-performance computing center to own a D-Wave Advantage quantum computing system.

Microsoft wrote Wednesday that the company was on track to build a prototype of a scalable quantum computer "in years, not decades."

Rather than punch down shares of quantum computing peers, Microsoft's latest achievement appears to have instilled confidence in the sector. While smaller quantum pure plays have yet to turn a profit, their rising stock prices serve as a mark of confidence that they are on the right path.

Mahoney Asset Management CEO Ken Mahoney encouraged investors to "remain cautiously optimistic" for now. Some companies "may outright fail," he continued, "since it is a volatile and new space, and we haven't really seen any companies using this for practical applications at a large scale that they are able to monetize."

Wall Street should take time to decipher who the leaders will be, "and earnings and developments like this from Microsoft or any other company involved in the space will continue to tell us more," Mahoney said.