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BofA Securities raised its price target on IBM (NYSE:IBM) stock to $320.00 from $290.00 on Wednesday, while maintaining a Buy rating following a comprehensive analysis of the company. The stock, currently trading at $285.94, has surged 71% over the past year, reaching new 52-week highs according to InvestingPro data.
The research firm cited IBM’s transformational initiatives as a key factor in its decision, noting that the company remains an attractive investment despite trading at all-time highs. With annual revenue of $62.8 billion and a robust financial health score rated as "GOOD" by InvestingPro, BofA’s analysis focused on IBM’s strategic positioning in emerging technologies.
IBM’s growth potential in generative AI and agentic AI technologies factored prominently in the firm’s assessment. BofA also highlighted the company’s future prospects in quantum computing as contributing to its positive outlook.
Strong free cash flow driven by internal productivity initiatives represents another significant factor in BofA’s evaluation. The firm indicated this cash flow strength could enable IBM to pursue additional merger and acquisition opportunities.
BofA characterized IBM as a "defensive investment with improving revenue growth," suggesting the company’s financial trajectory could support continued reinvestment and expansion through strategic acquisitions.
In other recent news, International Business Machines (IBM) has announced its ambitious plan to develop a practical quantum computer by 2029, with further expansion by 2033. This initiative includes constructing the "Starling" quantum computer, expected to house about 200 logical qubits, at a new data center in Poughkeepsie, New York. Additionally, IBM has reinforced its collaboration with Finanz Informatik to enhance IT services for the German Sparkassen-Finanzgruppe, focusing on AI, automation, and hybrid cloud computing. This partnership aims to modernize core IT systems and improve service delivery across more than 340 savings banks.
In the realm of analyst assessments, Stifel has maintained a Buy rating on IBM with a price target of $290, citing IBM’s AI initiatives and hybrid-cloud capabilities as key growth drivers. Conversely, UBS has reiterated a Sell rating with a $170 price target, even after attending IBM’s Think 2025 event, which showcased AI advancements and strategic initiatives. Morgan Stanley (NYSE:MS), maintaining an Equalweight rating with a $233 price target, highlighted IBM’s potential in the generative AI sector, emphasizing its strategic position to address enterprise AI complexities. These developments reflect IBM’s ongoing efforts to innovate and expand its technological footprint while navigating varied analyst perspectives.
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