IBM is primed for its "next phase of AI growth" and can push higher even after rallying to record highs in recent weeks, Wedbush analyst Dan Ives said Friday. Ives increased his target for IBM stock to 325 from 300 while reiterating an outperform call in a new client note.
"While the stock has had a great run so far in 2025, we believe IBM is still under owned and in the early stages of a renaissance of growth with AI the key driver," he wrote.
Ives pointed to the $6 billion generative AI "book of business" that IBM reported with its first-quarter earnings in late April. He said IBM has been able to integrate AI across its enterprise offerings while also seeing momentum for its "hybrid cloud" services.
"IBM is seeing strong and growing demand in the field, based on our field checks, across its organic Gen AI products, including its AI agents and WatsonX," Ives said.
IBM is also positioning itself for longer-term opportunities in quantum computing, Ives added. The company said last that it plans to build the world's first "large-scale, fault-tolerant quantum computer" by 2029.
Meanwhile, BofA Securities analyst Wamsi Mohan was similarly positive in a client note Wednesday. He stuck to a buy call and upped his price objective for IBM stock to 320 from 290.
"Despite trading at all-time highs, (IBM) remains interesting due to the transformational initiatives undertaken by management, positioning for growth in Gen AI, Agentic AI (and eventually quantum), and strong free-cash-flow driven by internal productivity initiatives," Mohan wrote.
IBM Stock Is Up 29% This Year
On the stock market today, IBM stock slipped a fraction to 281.64 in premarket trading. Shares closed at a record 283.21 on Wednesday, before trading was closed Thursday for the Juneteenth holiday. Shares appear set to gain for a fourth straight week.
IBM shares have gained 29% so far this year, following a 35% rally in 2024. Shares of the more than century-old tech giant returned to record highs for the first time in a decade last September and have rallied further since then. The company's gains have been helped by increasing confidence from investors that the company can benefit from AI demand.
Still, analysts are mixed overall on whether IBM can keep its rally rolling. Mohan and Ives are among 11 Wall Street stock analysts out of 22 following IBM who rate it as a buy. Eight analysts hold a neutral call while three have placed a sell warning on IBM stock.
After taking a hit following its first-quarter earnings report in late April, IBM stock quickly bounced back. Shares broke out on May 15 above a consolidation pattern buy point at 266.45. After pulling back slightly later that month, IBM has rallied 9% so far in June.
IBD's MarketSurge shows IBM stock sitting just above a 5% buy zone from the recent breakout. IBM stock has an IBD Composite Rating of 86 out a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating.
