Dan Ives, the head of technology research at Wedbush, has reiterated his optimism for IBM (IBM). This time, by raising the price target on the tech titan to $350 from $320 earlier. The revised price target implies an upside potential of about 15% from current levels. However, if Ives and his team of analysts are to be believed, the target price should have been higher.
“Based on our recent research, IBM’s portfolio across AI, hybrid cloud, automation, and cybersecurity continues to demonstrate strong momentum. Clients are seeking trusted, scalable, and compliant solutions that can be deployed in complex environments. As more enterprises begin large-scale AI deployments, IBM’s ability to integrate software, consulting, and infrastructure into a unified technology stack remains a key advantage driving its business flywheel," according to the report.
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Quite a bullish tone, but does that make IBM a “Buy” at the current juncture? Let's find out.
www.barchart.com IBM Is Quietly Building Away from the Spotlight
IBM's AI credentials were justifiably highlighted by Ives and his team, and how data remains at the core of it, but there's another force driving Ives' optimism about the company: quantum computing. Ives believes IBM is in the “early innings” of positioning itself at the intersection of AI and quantum computing and that strategy is underappreciated.
How IBM is looking to be a winner in the AI space warrants a look at how it is leveraging its “data moat," as per Ives' words.
The centerpiece of this is watsonx.data, a hybrid, open data lakehouse that unifies structured and unstructured data across on-premises, cloud, and multi-cloud environments. In June 2025, IBM launched two new additions within that ecosystem, watsonx.data integration and watsonx.data intelligence, both aimed at making enterprise data AI-ready by unifying governance, quality, lineage, and sharing in a single stack rather than scattering them across different tools. The headline performance has been noteworthy. IBM's testing showed that connecting AI agents to unstructured data through watsonx.data delivers 40% more accurate AI than conventional retrieval-augmented generation approaches.
Then there was the acquisition of DataStax in May 2025, which brought in NoSQL and vector database capabilities built on Apache Cassandra, directly strengthening IBM's ability to handle the kind of real-time, memory-intensive workloads that agentic AI demands.
Meanwhile, to capture the agentic AI market meaningfully, IBM's Agent Catalog now offers access to more than 200 pre-built agents from IBM and its partners, which dramatically lowers the barrier to deployment for enterprises that do not want to build everything from scratch. Red Hat is the structural foundation that makes all of this portable. The IBM agentic stack, including watsonx Orchestrate, runs on Red Hat OpenShift and Red Hat AI, and IBM's newly announced Sovereign Core product extends those investments across hybrid and partner environments. With this, an enterprise in a regulated industry can now run IBM AI agents on-premises, in a public cloud, or in a sovereign cloud environment without rewriting a single workflow.
Robust Q1
IBM has continued to deliver solid financial growth and consistent profitability gains, even as some observers question its position in the rapidly evolving artificial intelligence landscape. The company has now exceeded analyst forecasts for earnings in eight consecutive quarters, including its most recent results.
For the first quarter of 2026, total revenue rose 9% compared with the same period a year earlier, reaching $15.9 billion. Software revenue grew 11%, consulting increased 4%, and infrastructure advanced 15% on a year-over-year basis. Adjusted gross margins expanded to 57.7% from 56.6% in the prior year period.
Diluted earnings per share climbed 19% to $1.91, comfortably beating the consensus estimate of $1.81. Alongside the strong earnings, IBM announced an increase in its quarterly dividend to $1.69 per share. With a current dividend yield of 2.65% and more than 25 consecutive years of dividend increases, the company maintains its status as a Dividend Aristocrat.
Cash flow from operations reached $5.2 billion in the quarter, up from $4.4 billion in the year ago period. IBM ended the quarter with $10.8 billion in cash, which exceeded its short-term debt balance of $8.7 billion.
From a valuation standpoint, IBM shares appear reasonably priced relative to the broader market. The stock trades at a forward P/E multiple of 25.79x, a P/S ratio of 4.21x, and a P/CF multiple of 16.97x. These metrics sit below or in line with sector averages, offering investors an attractive entry point given the company's steady performance.
Valued at a market cap of $301.2 billion, IBM stock is up 2.84% on a YTD basis. Notably, the stock also offers a dividend yield of 2.27%.
Analyst Opinion
Analysts have assigned a rating of “Moderate Buy” for IBM stock. The mean target price of $293.45 has already been surpassed by shares, while the Street-high target of $365 suggests potential upside of about 18% from current levels. Out of 21 analysts covering the stock, 11 have a “Strong Buy” rating, two have a “Moderate Buy” rating, eight have a “Hold” rating, and one analyst has a “Strong Sell” rating.
www.barchart.com On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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