We recently compiled a list of the 10 Best Quantum Computing Stocks to Buy for 2025. In this article, we are going to take a look at where Honeywell International Inc. (NASDAQ:HON) stands against the other quantum computing stocks.
Quantum computing is a revolutionary technology that integrates quantum physics properties into a computer. This technology has the potential to revolutionize industries by solving complex issues at a rapid pace as compared to traditional computing methods. Notably, businesses across sectors, such as finance, healthcare, and transportation, continue to explore several benefits of quantum computing in a bid to have a competitive edge and fuel innovation.
Trends To Watch Out For in 2025
Heading into 2025, government aid, strategic initiatives, and legislative support for research are some of the key trends likely to fuel growth. In July 2024, US Senators John Hickenlooper and Michael Bennet highlighted the Department of Commerce’s announcement that Colorado’s Elevate Quantum was given $40.5 million in federal funding to build the nation’s leading quantum ecosystem.
Hickenlooper added that Colorado is regarded as the Silicon Valley of the quantum era, and Elevate Quantum is expected to lead. Hickenlooper went on to say that Quantum is well-placed to revolutionize medical drug discovery, supercharge AI, strengthen US cybersecurity, and support the transition to clean energy.
Also, in late November 2024, The Senate advanced the Department of Energy (DOE) Quantum Leadership Act of 2024, proposing $2.5 billion over 5 years to fuel US quantum R&D. Notably, the bipartisan bill emphasizes quantum networking, domestic manufacturing, and public-private partnerships to ramp up quantum innovation.
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Industries Likely to Benefit
The Wall Street Journal reported that quantum computers possess the potential to reduce global carbon emissions by 7 gigatons by 2035 and 150 gigatons by the upcoming 30 years, while adding up to $1.3 trillion in value to key transition industries, as per McKinsey. The rapid computational power it promises is expected to revolutionize batteries for electrification, transform carbon-heavy industrial operations, establish cleaner methods for agriculture, and help reimagine fuel’s future.
Grand View Research highlighted that the growth in the quantum computing market in the US should be driven by higher government and private sector investment in quantum technologies. This growth is likely to stem from the potential of quantum computing to revolutionize industries including materials science, drug discovery, and finance.
Our Methodology
To list the 10 Best Quantum Computing Stocks to Buy for 2025, we conducted extensive research and sifted through several online rankings. After getting the initial list of 12-15 stocks, we chose the ones that were popular among hedge funds and that analysts saw upside to. Finally, the stocks are arranged in ascending order of their hedge fund sentiment, as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 55
Honeywell International Inc. (NASDAQ:HON) has made numerous investments in the development of quantum computing technologies. The company’s quantum-computing business, Quantinuum, is at a critical spot when considering the breakup of this conglomerate. Around July 2024 end, Bloomberg reported that Honeywell International Inc. (NASDAQ:HON) has been considering going for an IPO of Quantinuum. It has also held several meetings with numerous investment banks regarding the potential listing in the US and might get a valuation of ~$10 billion.
With the help of Quantinuum, Honeywell International Inc. (NASDAQ:HON) continues to position itself to take on a significant share of the growing quantum computing-as-a-service market. Therefore, the ability to access quantum computers through a cloud (as a service) should attract businesses not ready to build their own quantum infrastructure. By accessing its quantum hardware and software via cloud-based platforms, Honeywell International Inc. (NASDAQ:HON) is expected to generate recurring revenue from this emerging industry. Furthermore, Quantinuum is expected to benefit from collaborations with several prominent players such as Microsoft and Airbus, further enhancing its capabilities and broadening its customer base.
Wolfe Research analyst, Nigel Coe, believes that Honeywell International Inc. (NASDAQ:HON)’s Quantinuum reflects a comparable business to lonQ, which is a leading quantum computing company well-placed to capture the growth momentum of burgeoning quantum computing technology. Notably, Quantinuum’s focus on both quantum hardware (trapped-ion technology) and software enables it to differentiate itself by catering to both sides of the quantum computing equation.
Overall HON ranks 4th on our list of the best quantum computing stocks to buy for 2025. While we acknowledge the potential of HON as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than HON but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.