BofA Raises IBM Price Target to $335, Strong Software Growth Ahead

Written by Emily J. Thompson, Senior Investment Analyst

IBM+2.59%

Source: Yahoo Finance

Updated: 1h ago

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Source: Yahoo Finance

Price Target Increase: BofA Securities analyst Wamsi Mohan raised IBM's price target from $315 to $335 while maintaining a Buy rating, reflecting confidence in the company's strong free cash flow outlook.
2025 Outlook: Despite a robust performance in 2025, analysts caution that 2026 may see modest growth due to a weaker close to F25 and several headwinds, with anticipated revenue growth of about 5%.
Restructuring Expense Impact: BofA estimates a $400 million workforce rebalancing expense in Q4, which is expected to limit full-year 2025 PTI margin expansion to about 70 basis points, below management's guidance of 100 basis points.
Software Revenue Growth: Software revenue is projected to grow approximately 10% in 2026, with the Confluent deal likely contributing positively to software revenue, although it may slightly dilute earnings per share.

IBM

$305.67+Infinity%1D

Analyst Views on IBM

Wall Street analysts forecast IBM stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for IBM is 295.18 USD with a low forecast of 210.00 USD and a high forecast of 350.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

13 Analyst Rating

7 Buy

5 Hold

1 Sell

Moderate Buy

Current: 297.950

Low

210.00

Averages

295.18

High

350.00

Current: 297.950

Low

210.00

Averages

295.18

High

350.00

RBC Capital

Outperform

maintain

$300 -> $350

Al Analysis

2026-01-05

Reason

RBC Capital

Price Target

$300 -> $350

Al Analysis

2026-01-05

maintain

Outperform

Reason

RBC Capital raised the firm's price target on IBM to $350 from $300 and keeps an Outperform rating on the shares. 2026 is likely to be a year when AI tailwinds become more evident for companies well positioned for enterprise AI adoption, while less prepared peers may remain pressured by the "AI is the death of software" narrative, the analyst tells investors in a research note. Enterprise spending appears to be stabilizing and improving in select areas, with GenAI driving innovation even as management teams remain conservative in early 2026 guidance, the firm says.

Erste Group

Hold -> Buy

upgrade

2025-12-05

Reason

Erste Group

Price Target

2025-12-05

upgrade

Hold -> Buy

Reason

Erste Group upgraded IBM to Buy from Hold following the "good" Q3 report. The firm sees the company's sales increasing more than expected in 2026. The shares should rally on IBM's positive outlook and price gains, the analyst tells investors in a research note.

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Oppenheimer

Outperform

initiated

$360

2025-11-21

Reason

Oppenheimer

Price Target

$360

2025-11-21

initiated

Outperform

Reason

Oppenheimer initiated coverage of IBM with an Outperform rating and $360 price target. The firm says its bullish stance is predicated on its belief IBM's software portfolio should see sustained "double-digit" revenue growth driven by strength in Automation and improving growth in RedHat, consulting should grow at a sustained "low single digits" with recovery in application development/management, and additional revenue optionality with creation and management of AI applications. Oppenheimer believes these drivers will result in strong expansion activity with existing customers, and drive continued gross and pre-tax margin expansion. The stock should also re-rate higher when IBM's pivot to software is more widely appreciated, it adds.

Melius Research

Benjamin Reitzes

Buy

maintain

2025-10-31

Reason

Melius Research

Benjamin Reitzes

Price Target

2025-10-31

maintain

Buy

Reason

After having spent a day at IBM's quantum lab and meeting with Jay Gambetta, Director of IBM Research, Melius Research analyst Benjamin Reitzes reiterates a Buy rating on the shares, telling investors that IBM has the most quantum computers in use today, "by far," and arguing that its potential in quantum "looks like it could amount to billions of high-margin annualized revenue" starting in 2029. The "Starling" line of quantum computers has the potential to unlock capabilities to run revolutionary applications on a 200 qubit platform with an error correction rate that "finally allows this technology cross the chasm," according to the analyst, who adds that IBM seems to have "the ingredients to win in Quantum since it arguably has the best hardware roadmap and the mindshare of developers with its Qiskit platform."

About IBM

International Business Machines Corporation is a provider of global hybrid cloud and artificial intelligence (AI) and consulting expertise. The Company’s segments include Software, Consulting, Infrastructure and Financing. The Software segment includes hybrid cloud and AI platforms, which allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on integrating skills on strategy, experience, technology and operations by domain and industry. The Infrastructure segment is focused on the hybrid cloud infrastructure market, providing on-premises and cloud-based server and storage solutions. In addition, it offers a portfolio of life-cycle services for hybrid cloud infrastructure deployment. The Financing segment provides client and commercial financing, facilitating its clients’ acquisition of hardware, software and services. It helps clients in more than 175 countries.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.