Barclays initiated coverage with an Overweight rating and $350 price target on IBM, citing mid-single-digit organic revenue growth, margin expansion and that software drives nearly half of revenues. IBM will invest over $10 billion in quantum computing through 2029, backed by $1 billion in government support and a $1 billion spinout facility.
Barclays began coverage on IBM shares with an Overweight rating and set a $350 price target, reflecting expectations of mid-single-digit organic revenue growth and continued margin expansion.
Nearly half of IBM’s revenue and most of its profit derive from software offerings, with infrastructure software serving large, regulated enterprises and creating a sticky customer base resistant to disruption.
IBM plans to invest over $10 billion in quantum computing by 2029, aiming to launch a large-scale commercial system, supported by $1 billion in government funding and a $1 billion spinout to build a quantum wafer fabrication facility.
IBM stock surged nearly 30% in May—its best monthly gain in almost 24 years—and rose about 8% in premarket trading following the analyst upgrade and quantum funding announcement.
