June 4 (Reuters) - Honeywell's ( HON ) Quantinuum is set

to make its U.S. market debut later on Thursday, after strong

investor interest helped the quantum computing company raise

$1.68 billion in an upsized initial public offering.

Breakthroughs in the fast-growing technology have spurred

bets that quantum machines could eventually outperform

conventional computers on certain complex tasks.

Sentiment was also buoyed after the U.S. government last

month announced a $2 billion initiative to take equity stakes in

nine quantum computing companies, including a planned $100

million investment in Quantinuum.

"The investment case is centered on the long-term potential

of quantum computing and its potential role in future computing

infrastructure," said IPOX Schuster analyst Kat Liu.

"The support is meaningful because quantum computing is

increasingly viewed as a strategic technology with implications

for national security, AI, communications and advanced

computing."

The sector has also drawn investor interest as increasingly

sophisticated and resource-intensive AI systems fuel

expectations that demand for quantum computers could eventually

gain traction.

Shares of peer IonQ ( IONQ ) have surged about 52% this

year, giving the company a market value of about $25.47 billion,

according to LSEG data.

Broomfield, Colorado-based Quantinuum had sold 28 million

shares at $60 each, above its marketed range of $53 to $55 per

share. The company earlier this week raised the shares on sale

to 26.5 million.

The debut comes as the U.S. new listings market regains

impetus, although investor appetite remains concentrated in

technology and other high-growth sectors.

ADOPTION STILL FACES CHALLENGES

Founded in 2021 through the merger of quantum computing

operations of Honeywell ( HON ) and software specialist

Cambridge Quantum, Quantinuum develops quantum hardware and

software systems designed to solve complex computational

problems.

"Quantinuum also benefits from Honeywell's ( HON ) backing and has

expanded beyond hardware into software, cybersecurity, and

quantum networking applications. Commercial adoption remains

limited, but investors are primarily buying into the long-term

opportunity," said Liu.

Honeywell ( HON ) will own about 48.1% of the combined voting power

in the company upon completion of the offering, Quantinuum has

said in a regulatory filing.

Still, Quantinuum's commercial revenue remains highly

concentrated.

Japan's RIKEN research institute accounted for roughly 60%

of the company's 2025 revenue, highlighting the industry's

continued reliance on government and research spending.

Edward Best, a partner at Willkie Farr & Gallagher, said

investors should monitor whether the company broadens its

customer base and increases the number and value of commercial

contracts over time.

The industry also continues to grapple with high development

costs, technological complexity and an uncertain timeline for

widespread commercial adoption.

J.P. Morgan and Morgan Stanley are the lead active

book-running managers for the offering.

(Reporting by Prakhar Srivastava and Pritam Biswas in

Bengaluru; Editing by Sriraj Kalluvila)