IBM Stock Rallies as Bank of America Lifts Price Target on Higher Guidance Expectations

Key Stats for IBM Stock

• Price change for IBM stock in last 1 month: 7%
• $IBM Share Price as of Jul. 6: $300
• 52-Week High: $332
• $IBM Stock Price Target: $295

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What Happened?

IBM (IBM) stock jumped more than 3% after Bank of America raised its price target on the stock from $315 to $330. Analyst Wamsi Mohan kept his buy rating and told clients he expects IBM to post a “solid quarter and guidance raise” when it reports second-quarter earnings later this month.

Mohan’s team is modeling $18 billion in revenue for the quarter, representing 6% growth. They also expect adjusted earnings of $3.05 per share, up 9% year over year.

Both numbers come in slightly above Wall Street’s expectations. The broader analyst consensus calls for 5% revenue growth and 8% earnings growth for the quarter.

Bank of America pointed to a few areas of upside that aren’t even baked into its current estimates yet. These include faster-than-expected cost savings from IBM’s Confluent acquisition, along with stronger growth in software and in the power and storage side of its infrastructure business.

IBM bought Confluent, a cloud-data streaming company, for $11 billion earlier this year.

The rally also comes on the heels of a strong stretch for IBM stock. Shares have now risen for six straight sessions.

That follows a huge run in late May, when IBM stock jumped more than 40% after the company won a $1 billion quantum computing award from the federal government.

That news pushed the stock to a record high of $332.46 on June 2, before it pulled back and has since resumed climbing.

IBM also made quantum news again this week.

• The company said it used its quantum-centric supercomputing approach, working alongside Oak Ridge National Laboratory and the Cleveland Clinic, to simulate a molten-salt material that could help produce the fuel needed for fusion energy.
• IBM described the result as “early but promising.”

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What the Market Is Telling Us About IBM Stock

Investors are treating this price target hike as a signal that IBM’s core business, especially software, is on solid footing heading into earnings.

While the quantum computing headlines have grabbed attention this year, analysts like Mohan are making clear that the bigger story for IBM stock right now is software and AI growth, not quantum, which remains more of a long-term opportunity.

With IBM generating $68.9 billion in revenue over the past twelve months and growing at nearly 10%, the market seems to be rewarding a company that’s showing steady, broad-based momentum.

Still, some valuation models suggest the stock may be trading slightly above fair value at current levels, something investors will want to watch closely as earnings approach.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!