Why 2026 Could Be the Tipping Point for Its Smoke-Free Dominance

• Philip Morris International operated outside the U.S. for years, but has entered the market with smoke-free products.

• Sales of Iqos Iluma in the United States could be a game changer once approved.

• Adding the upside from the U.S. nicotine market to Philip Morris International’s existing business makes the stock a no-brainer to buy and hold.

• 10 stocks we like better than Philip Morris International ›

Philip Morris International (NYSE: PM) has been a strong performer this year. The stock has fallen 20% from its high, yet shares are still up by more than 24% since January, outpacing the broader stock market.

The tobacco stock has emerged as a clear winner in the new-look nicotine and tobacco space, where traditional cigarettes and chewing tobacco are losing ground to smoke-free alternatives, such as electronic vapes, heat-not-burn devices, and oral nicotine salt pouches.

Philip Morris was an early mover in the heat-not-burn market with Iqos. Then, it acquired Swedish Match a couple of years ago, giving it ownership of Zyn, the most popular oral nicotine brand. Smoke-free products now account for 41% of the company’s revenue. Meanwhile, Philip Morris continues to sell Marlboro cigarettes in almost every country except the United States.

Next, the company could hit a new gear entirely in 2026. Here is what you need to know.

Philip Morris International was formerly part of Altria Group until a spinoff in 2008. For years, Altria sold Marlboro cigarettes in the United States, while Philip Morris sold them internationally. However, Philip Morris has recently begun to encroach on the lucrative U.S. market with other products.

The company established a foothold in the U.S. with Zyn and is now targeting Altria and other traditional cigarette companies with Iqos. Philip Morris developed Iqos years ago as an alternative to cigarettes, and it has thrived in foreign markets. The device heats tobacco to the point of producing vapor, but not enough to burn it and cause it to smoke.

The U.S. market offers a massive growth opportunity, even for the world’s largest publicly traded tobacco company. Altria’s sales of smokeable products totaled $21.2 billion last year. Philip Morris reports an approximate 72% success rate in converting smokers to Iqos.

Philip Morris is currently awaiting FDA approval to sell Iqos Iluma in the United States, the latest and most advanced version of its heat-not-burn device, launched following a patent dispute with British American Tobacco.