Honeywell’s Quantinuum inches closer to a pivotal step for investors
An under-the-radar part of Honeywell’s sprawling portfolio is inching closer to getting its day in the sun. Honeywell announced Thursday that its quantum computing company, Quantinuum, has raised another $600 million in funding at an approximately $10 billion valuation. The latest round, which doubles Quantinuum’s valuation of $ 5 billion last seen in January 2024 , sets the privately held firm up for a highly anticipated initial public offering — a key step in unlocking value for Club holding Honeywell as its majority shareholder. Honeywell CFO Mike Stepniak said so himself in reaction to the fresh capital raise during an industry event on Thursday morning. “I’m excited about commercializing this business and ultimately I think this really [gets us to an] IPO,” Stepniak said at an industrials conferenced hosted by Jefferies. “Our intent is to IPO this business.” In July, Honeywell CEO Vimal Kapur said that the company is looking to bring Quantinuum public in 2027. A successful IPO would help show that Honeywell’s long-term investment into Quantinuum will have been worth it. Quantinuum was formed back in 2021 following a merger of Honeywell’s Quantum Solutions with Cambridge Quantum. However, it has never been a source of significant revenue or profits for the industrial conglomerate given quantum computing technology is still in the early innings and a ways off from widespread commercial use. In 2024, Honeywell reported a loss of $454 million for the segment that houses its stake in Quantinuum. Still, there’s a lot of potential value to unlock for Honeywell because of the promise that many see in quantum computing, which can solve complex tasks far beyond the abilities of traditional computers due to fundamentally different architectures. Technology stalwarts including Alphabet and IBM are among those pursuing the nascent technology — in fact, it was a breakthrough quantum chip from Alphabet’s Google in late 2024 that catalyzed a new wave of interest in the industry and sent stocks of publicly traded quantum firms on a major tear. Club name Nvidia has shown an increased focus on quantum , and its venture capital arm participated in Quantinuum’s capital raise. Other new investors include Quant Computer, QED investors, and existing shareholders like JPMorgan Chase , Mitsui, among others. Financial services is one industry that sees a lot of potential in quantum computing, and JPMorgan even as an internal research group that focuses on the technology. Honeywell benefits from Quantinuum by more than just capitalizing on this trend, though. The market seems to have not realized Quantinuum’s value to the industrial conglomerate yet either, according to Bank of America’s Andrew Obin. “What we’ve said is that the market doesn’t seem to be assigning a particular value to their stake in Quantinuum, so risk/reward is definitely skewed to the upside,” Obin told CNBC in an interview Thursday afternoon. Case in point: Shares of Honeywell were up only slightly on the Thursday announcement. Plus, Obin added that Quantinuum is just one of the ways “you can win with Honeywell stock.” The Club believes another is the company’s forthcoming business spin-offs, which we have long argued will unlock more value for shareholders as Honeywell becomes a more streamlined company and its crown jewel aerospace segment gets to operate on its own. Honeywell’s advanced materials business is on track to be spun off in the fourth quarter of this year, while the aerospace separation is tracking for next year. (Jim Cramer’s Charitable Trust is long HON, NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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