Quantum Computing’s Biggest IPO Prices Strong and Then Fizzles - Morningstar
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Quantinuum’s Nasdaq debut priced above its initial range, but ended the day flat.Quantum computing’s biggest IPO started with a pop and ended with a fizzle. Quantinuum QNT, the Honeywell-backed company that builds quantum computing hardware and software, made its Nasdaq debut on Thursday, opening at $68 per share and raising $1.68 billion at a $15.6 billion valuation. But despite momentum and initial enthusiasm, the company closed the day just a hair above its $60 IPO price.This stands in stark contrast to the blockbuster listings that have defined this year’s IPOs so far. Investors say the debut shows that even the buzziest deep tech companies still face growing pains. “It’s hard to draw too many conclusions from just one day,” says Alex Taub, principal at QED Investors, which backed Quantinuum in a September fundraising round. “Deep tech comes with a lot of volatility, but removing that volatility and [legitimizing] this in a real public market space isn’t the worst thing either. It’s a kind of stamp of approval for an emerging technology.”Just weeks ago, on May 14, AI chipmaker Cerebras opened at almost 70% above its IPO price.Thursday’s listing caps a busy stretch for quantum computing companies making public exits. Over the past year, several such startups have gone public via SPAC, including Infleqtion, IQM, and Pasqal. Quantinuum’s traditional IPO is one of the largest the sector has seen, according to PitchBook data.In May, the Trump administration signed nine letters of intent to provide more than $2 billion in funding for US quantum computing companies. Quantinuum will receive $100 million of that investment.In 2021, Quantinuum was formed when Honeywell merged its quantum computing unit with another company, Cambridge Quantum. The company utilizes a “full stack” approach, building both quantum computing hardware and accompanying software. Honeywell has retained around 49% of Quantinuum’s voting rights after the offering, according to the company’s S-1 filing.NVentures (the VC arm of chipmaker Nvidia), Serendipity Capital, and Quanta Computer were among the more recent investors. Quantinuum last raised $600 million at a $10 billion valuation in September. QED Investors, which traditionally backs fintech companies, joined the round.According to Taub, the rationale behind QED’s investment was the application of quantum technologies within large financial institutions. “We’re trying to chase the puck in terms of where we see fintech going, not today, but five to 10 years out. There’s a lot of opportunity for financial services players here to execute,” he explains. Taub says QED did not sell its shares in the IPO. He declined to share whether the firm plans to hold its stake once the six-month lockup period expires.QED’s bet is one slice of a broader shift. Will Zeng, a partner at Quantonation, a VC firm focused on quantum, said the unprecedented buildout of data centers and compute to feed AI has left investors hungry for exposure to whatever comes next—and increasingly, they see quantum as part of the same wave. “We’re seeing capital markets recognize the long-term potential of compute infrastructure, and they see quantum as a potentially disruptive part of that,” Zeng says. “It’s all under the bracket of compute buildout. What’s a part of that you can buy early right now? Quantum.” The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data. 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