This 1 Cheap Quantum Computing Stock Could Be a Top Buy for 2026

Quantum computing is one of the biggest investment stories of 2025. Most investors chase specialized quantum computing stocks like IonQ (IONQ), which has seen significant price swings throughout the year.

However, a much larger company, Honeywell International Inc. (HON), is also part of this disruptive industry. HON has a market capitalization of $125 billion, has seen its shares fall 8% year to date (YTD), and is in the process of being spun off into three separate businesses.

Most people still think of Honeywell as a traditional industrial company that makes thermostats and building controls. However, the industrial giant also owns a majority stake in Quantinuum, a specialist company currently leading the race for quantum computing technology.

To understand why this is important, you have to understand how these computers are actually built. Standard quantum computers are prone to errors. To fix these errors and create a reliable working unit of data (called a “logical qubit”), most companies require hundreds of individual “physical qubits” working together.

Quantinuum offers significant efficiency advantages due to its special design. Its system requires two physical qubits to create one logical qubit. This 2 to 1 ratio makes the technology more practical and closer to real-world business tasks.

For patient investors, Honeywell offers a way to bet on the future of computing without having to deal with the extreme volatility of a money-losing startup.

Honeywell International is implementing a comprehensive portfolio transformation that will unlock significant shareholder value by 2026. Recently, Chief Financial Officer Mike Stepniak outlined aggressive plans to streamline the industrial conglomerate while monetizing quantum computing assets that have appreciated in recent months.

Honeywell will be split into three distinct entities. The first entity is its advanced materials division, which was renamed Solstice Advanced Materials (SOLS) on October 30.

The second is its flagship aerospace division, which will become one of the largest pure-play aerospace suppliers when spun off. Aerospace CEO Jim Currier emphasized that all capital allocation decisions after the spinoff will be made by the aerospace leadership team, rather than competing across Honeywell’s diverse portfolio. The business has achieved double-digit sales growth for 13 consecutive quarters and maintains a record order backlog of $39 billion, with an order-to-bill ratio of 1.2.

Stepniak emphasized that aerospace industry profit margins bottomed out in the second quarter and are expected to expand through 2026, driven by multiple positive factors. In addition, pricing improvements for OEM contracts that previously lacked tariff provisions will be implemented in the second half of the year. Supply chain health is also improving significantly, with inventory days falling for the first time in three years as restrictions on castings, forgings and precision machining ease.

Automated businesses will be simplified through restructuring and cost reduction. The building automation segment has emerged as the crown jewel, achieving high single-digit organic growth driven by data center demand and outcome-based software services through the Forge platform. The segment’s margins reached 27% and should continue to expand as the Access Solutions acquisition proves accretive.

The company recently successfully completed a financing round for Quantinuum, attracting investment from Nvidia (NVDA) and JPMorgan Chase (JPM). Stepniak emphasized that management does not view Honeywell as a natural long-term owner but expects a high-return monetization event to occur within 24 months as the technology matures commercially.

Management expects annual organic growth to be between 4% and 7%, with annual margin expansion of 40 to 60 basis points. The company views 2025 as a transitional low, leading to stronger results in 2026 and acceleration in 2027 as separation benefits materialize and quantum assets are converted into cash.

Of the 24 analysts covering HON stock, 11 recommend a “Strong Buy,” 1 recommend a “Moderate Buy,” 11 recommend a “Hold,” and 1 recommend a “Moderate Sell.” The average price target for HON stock is $237.45, which is $196 above the current price.

On the date of publication, Aditya Raghunath did not hold (either directly or indirectly) any securities mentioned in this article. All information and data in this article are for reference only. This article was originally published on Barchart.com