Preheat your oven to 350°F. Line a baking sheet with parchment paper and set aside.

In a stand mixer fitted with the paddle attachment, beat the softened butter and granulated sugar together on medium speed until light and fluffy, about 3 minutes. Scrape down the sides of the bowl with a rubber spatula.

Add the room-temperature egg and vanilla extract to the bowl. Beat on medium speed until the mixture is pale and fluffy, about 1 minute more.

Add the flour, baking powder, baking soda, and salt. Mix on low speed until just combined, with no streaks of flour visible. Be careful not to overmix. Add the rainbow sprinkles and pulse the mixer a few times to distribute them evenly, being careful not to overmix or the sprinkles may bleed.

Using a 1-ounce cookie scoop, portion the dough into 1-inch balls and place them on the prepared baking sheet, spacing them about 2 inches apart. Bake for 11 minutes, until the edges are set but the centers still look slightly underdone and gooey. This ensures a soft, chewy texture. Let the cookies cool on the baking sheet for 10 minutes, then transfer them to a wire rack to cool completely.