Quantinuum Shares Just Leapt 26%. Is the Stock Still a Buy?

Quantinuum (NASDAQ:QNT) shares surged 26% on Nov. 6 after the company reported strong bookings and raised its full-year revenue guidance. Nonetheless, 2026 has been a roller-coaster ride for the quantum computing stock, which is down 37% from its $60 IPO price in June.

For those new to the stock, Quantinuum was formed in 2021 from the merger of Honeywell's (NASDAQ:HON) quantum computing business and Cambridge Quantum. Honeywell retained a majority stake after the IPO. The company uses the trapped-ion approach, similar to IonQ (NYSE:IONQ), which has proven to be one of the most accurate quantum technologies. However, unlike IonQ, it does not use embedded microwave antennas in its chips, as it says they slow the process down too much.

Where Quantinuum really shines is with quantum error correction (QEC). While IonQ has attained the highest 2-qubit gate fidelity (accuracy) for its hardware at 99.99%, Quantinuum has achieved the highest logical fidelity through a combination of hardware and QEC. Its Helios system recently hit 99.995% logical fidelity in October. That's equivalent to fifty errors per 1 million operations, and it's why the company believes it's on track to deliver a fault-tolerant system by 2029.

Quantinuum has also proven to be a quantum software leader through its Nexus platform, which combines quantum application development and deployment into one space. Meanwhile, its quantum software development kit, TKET, acts as a universal translator, while its open-source quantum computing language, Guppy, can handle advanced error correction directly in the code. The company has 215 organizations using Nexus, up nearly 20% sequentially, and announced a multi-generational roadmap for the platform.

Quantinuum will introduce its new Sol quantum system in the first quarter of 2027, with full commercial availability in the second half of next year. It will be the first commercial system with 100 logical qubits with a targeted error rate of 99.999%, or one error in 100,000 operations.

Strong back order growth

Quantinuum's technological strength is starting to translate into robust results, which are currently mostly showing up in its order backlog. It recorded a record $98 million in bookings in the quarter, led by a large deal with Oracle (NYSE:ORCL). Last quarter, it announced that its Helios system will be integrated into Oracle's cloud infrastructure to provide customers with a quantum-artificial intelligence framework.

It also signed deals within both the government and enterprise segments. Its year-to-date bookings now stand at roughly $104 million, and it expects to end the year with orders exceeding $120 million. That should position the company well for 2027.

Third-quarter revenue, meanwhile, soared 233% to $9.1 million, driven by growth in its cloud business. It said the majority of its revenue came from government customers, although it said enterprise was strong.

Like other pure-play quantum computing companies, Quantinuum continues to report losses. Adjusted EPS came in at -$0.29, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were a loss of $80.5 million versus a loss of $45.3 million a year ago.

Through the first nine months of the year, Quantinuum had operating cash flow of -$229.9 million, while free cash flow was -$294.6 million. It ended the quarter with $1.9 billion in cash and equivalents and no debt.

Looking ahead, the company raised its full-year revenue outlook. It now expects revenue to be between $31 million and $34 million, up from a prior outlook of $28 million to $32 million.

Image source: Getty Images.

Is the stock a buy?

Quantum computing is still a very nascent technology, but Quantinuum is proving to be one of the technological leaders, achieving the highest logical fidelity rate given its QEC strength. Meanwhile, its deal with Oracle is set to be a growth driver, and its overall backlog is strong. At the same time, the company's technological roadmap, starting with Sol next year and Apollo in 2029, looks promising.

Overall, given how early quantum technology is, I believe in a basket investment approach, holding several sector stocks in small amounts. However, Quantinuum should be one of the larger positions in any quantum basket, even after its surge in price.

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Honeywell Technologies, IonQ, and Oracle. The Motley Fool has a disclosure policy.