“Not your father’s IBM” is right — Big Blue 2.0 is trading its navy suits for AI algorithms. Wall Street is finally taking notice as the century-old tech giant transcends from a sleepy hardware heavyweight to a software powerhouse. has already surged ~19% this year, including a 2.3% daily bump after Oppenheimer initiated coverage with a bold new outperform rating.
- “We believe investors have missed IBM’s transition, with the stock still covered by multiple IT hardware/services analysts,” says Oppenheimer’s analyst — forecasting a $320 price target (23.1% upside) as software now represents 45% of the firm’s business.
- While enterprise AI stocks like Salesforce and Palantir respectively trade at 53.5x and 628.6x earnings, IBM’s 37.5x signals a value play — attracting major institutions like IAIM, Raymond James, and Norway’s Norges Bank, the latter of which poured in $1.24B during Q4.
What analysts are watching: Following its 2019 acquisition, Red Hat’s AI-enabled software is fueling IBM’s ambitious 5% revenue growth target for 2025. Wedbush’s Dan Ives calls it a key player joining the “AI Party” alongside the aforementioned, higher multiple firms. With old Big Blue even attempting to replace its own workers with AI, perhaps it’s possible for the old dog to learn new tricks.
