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Investing.com - RBC Capital has reiterated an Outperform rating on IBM (NYSE:IBM) stock with a price target of $300.00, according to a research note released Thursday. The target represents modest upside from IBM’s current price of $288.53, with the stock trading near the upper end of its 52-week range of $209.77-$324.90.
The firm’s decision follows recent investor meetings that provided RBC with "a better understanding of growth drivers and positioning within the infrastructure business." The note highlighted that IBM ’s infrastructure segment had undergone a transformation in recent years, focusing on growth and operational efficiency. This transformation has contributed to IBM’s strong performance, with the stock delivering a 34.64% return year-to-date and 37.92% over the past year.
IBM’s current strategy remains centered on artificial intelligence and hybrid cloud solutions for enterprise customers. RBC noted that the company continues to embed AI capabilities across its platform offerings. As a prominent player in the IT Services industry, IBM has maintained consistent profitability with a 57.81% gross profit margin over the last twelve months.
The research note also mentioned quantum computing as "an area of high interest" for IBM. According to RBC, management outlined a practical approach to quantum technology that differentiates between realistic applications and hype, pointing to IBM’s product roadmap, partner ecosystem, software stack, and error correction capabilities.
RBC’s maintained Outperform rating reflects the firm’s positive outlook on IBM’s strategic direction and execution in key growth areas. While IBM trades at a relatively high P/E ratio of 34.66 and a PEG ratio of 1.55, the company has raised its dividend for 30 consecutive years, currently offering a 2.33% yield. InvestingPro analysis suggests IBM is slightly overvalued compared to its Fair Value, with 11 additional ProTips available to subscribers.
In other recent news, IBM has announced a partnership with the University of Dayton to develop next-generation semiconductor technologies. This collaboration includes a significant contribution of semiconductor equipment valued at over $10 million for a new nanofabrication facility, expected to be completed in early 2027. Additionally, Evercore ISI has reiterated an Outperform rating for IBM, with a price target of $315, citing the company’s strong positioning in areas like enterprise AI adoption and quantum computing. In another development, IBM has teamed up with UFC to launch an AI-powered platform, In-Fight Insights, which will provide real-time alerts during UFC events. IBM has also advanced to the next phase of DARPA’s Quantum Benchmarking Initiative, which aims to assess the feasibility of building a fault-tolerant quantum computer. Furthermore, UT Southwestern Medical Center has deployed IBM Fusion with the NVIDIA AI platform to boost its research capabilities. These recent developments highlight IBM’s continued focus on innovation and strategic partnerships.
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