IBM Story Is Underappreciated, Goldman Sachs Says Stock Can Re-Rate Higher
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 05 2025
0mins
Source: Benzinga
Analyst's Rating and Growth Projections: Goldman Sachs analyst James Schneider maintains a Buy rating for IBM with a $275 price target, highlighting the company's potential for over 5% revenue growth from 2025 to 2027, driven by strong software growth and market share gains in consulting.
Recent Performance and Investment Opportunities: IBM reported better-than-expected fourth-quarter earnings and revenue, while also showing a decline in stock price. Investors can gain exposure through ETFs like TDIV and TDVI.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy IBM?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on IBM
Wall Street analysts forecast IBM stock price to rise
16 Analyst Rating
11 Buy
4 Hold
1 Sell
Moderate Buy
Current: 274.850
Low
210.00
Averages
315.80
High
375.00
Current: 274.850
Low
210.00
Averages
315.80
High
375.00
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.
Meta AI Chief Faces Challenges and Opportunities One Year In
- AI Strategy Overhaul: Meta has invested over $14 billion in the past year to bring in Alexandr Wang and his team to revamp its AI strategy, yet it still lags behind competitors like OpenAI, highlighting the urgency and challenges the company faces in the AI sector.
- Muse Spark Model Launch: In April 2023, Meta launched the Muse Spark AI model, marking its first foray into proprietary foundation models; however, analysts emphasize that Meta needs to demonstrate the commercial viability of its AI tools to attract paying users and reduce reliance on its advertising business.
- Developer Trust Crisis: Following the failure of the Llama model, Meta's trust among AI developers has diminished, with industry experts suggesting that Wang's team must focus on internal applications rather than third-party developers to avoid further trust issues.
- Executive Pressure and Future Outlook: Despite positive internal feedback for Muse Spark, Wang and his team face high expectations from Zuckerberg to deliver more powerful AI models in the future, aiming to restore investor confidence and drive revenue growth.
See More
Zuckerberg's AI Investment Challenges
- AI Strategy Overhaul: Mark Zuckerberg's investment of over $14.3 billion to bring in Alexandr Wang and his team aims to revamp Meta's AI strategy; however, despite the launch of the Muse Spark model in April, Meta remains behind OpenAI and Google in the AI market, indicating a competitive disadvantage.
- Developer Trust Crisis: Although the launch of Muse Spark marks Meta's first foray into proprietary foundation models, developer trust has waned, with many believing the company has failed to effectively engage external developers following the Llama model debacle, potentially impacting future product adoption.
- Revenue Growth Struggles: Despite reporting a 33% revenue growth in Q1, the fastest rate since 2021, Meta's stock has fallen 18% over the past 12 months, making it the worst performer among tech giants, reflecting market skepticism regarding the commercialization of its AI products.
- Internal Pressure Intensifies: With Meta laying off about 8,000 employees in 2023, morale is low, and the high expectations placed on Wang and his team create immense pressure on Meta to achieve sustainable growth in AI, especially after its virtual reality investments have led to over $80 billion in losses.
See More
IBM Price Target Raised to $315 Amid Strong AI Demand
- Price Target Increase: BofA analyst Wamsi Mohan raised IBM's price target from $300 to $315, indicating an upside potential of over 15%, which reinforces market confidence in IBM's future performance.
- High Yield Stock: With an annual dividend yield of 2.50%, IBM is included among 12 high-yield Fortune 500 stocks, highlighting its appeal to investors seeking stable returns in the current market environment.
- Quantum Computing Investment: IBM announced a $10 billion investment in quantum computing over the next five years, following a letter of intent with the US federal government to establish a quantum chip foundry, enhancing its competitive edge in cutting-edge technologies.
- AI Project Funding: IBM plans to allocate $5 billion towards an AI-linked open-source software project, demonstrating its ongoing commitment to artificial intelligence, although analysts note that some AI stocks may offer greater upside potential.
See More
Salesforce Shares Drop 38.6% Year-to-Date
- Poor Stock Performance: Salesforce's shares fell 2.3% today, marking a year-to-date decline of 38.6%, indicating market concerns over its future growth prospects, which may lead to decreased investor confidence.
- Industry Comparison: As the worst-performing component in the Dow, Salesforce's struggles highlight its relative weakness in the highly competitive cloud computing market, potentially impacting its market share and profitability.
- Other Component Movements: IBM's stock decreased by 2.2%, while Goldman Sachs Group rose by 1.7%, reflecting varied market reactions to different companies, which could influence investors' asset allocation decisions.
- Market Sentiment Analysis: The ongoing decline of Salesforce may raise concerns about the entire tech sector, especially amid increasing economic uncertainty, potentially prompting more investors to reassess their investment strategies.
See More
CrowdStrike Reports Strong Earnings, Significant Stock Upside Ahead
- Strong Financials: CrowdStrike's fiscal Q1 2027 revenue surged 26% year-over-year to $1.39 billion, driven by record annual recurring revenue (ARR) of $5.4 billion, highlighting the company's robust performance in the cybersecurity sector.
- Stock Upside Potential: Analysts are bullish on CrowdStrike's future, with 78% of 54 analysts rating it a buy or strong buy, and an average price target of $712, indicating a potential 10% upside from the current price.
- AI Technology Edge: The Falcon platform leverages AI for advanced threat protection, and as the average cost of data breaches rises, the demand for its services continues to grow, further solidifying its market position.
- Market Recognition: CrowdStrike has been recognized as a Leader in Gartner's Endpoint Protection Magic Quadrant for seven consecutive years and was also named a Leader in the inaugural Cyberthreat Intelligence Technologies Magic Quadrant, underscoring its leadership and execution capabilities in the industry.
See More
CrowdStrike Stock Potential Analysis
- Stock Price Upside: CrowdStrike's stock has surged 362% over the past three years, significantly outperforming the S&P 500's 71% return, indicating strong growth potential in the cybersecurity sector that attracts investor interest.
- Strong Financial Performance: In Q1 of fiscal 2027, CrowdStrike reported a 26% year-over-year revenue increase to $1.39 billion, with annual recurring revenue (ARR) rising 24% to $5.5 billion, driving adjusted earnings per share (EPS) up 51% to $1.10, showcasing robust profitability.
- Optimistic Analyst Ratings: As of June, 78% of analysts rated CrowdStrike as a buy or strong buy, with Wall Street's average price target around $712, suggesting a 10% upside from Wednesday's closing price, reflecting market confidence in its future.
- AI and Cybersecurity Integration: CrowdStrike's Falcon platform is deemed critical AI infrastructure, and as AI technology evolves, its leadership in cybersecurity will be further solidified, especially in addressing the escalating threat of data breaches.
See More
Meta AI Chief Faces Challenges and Opportunities One Year In
- AI Strategy Overhaul: Meta has invested over $14 billion in the past year to bring in Alexandr Wang and his team to revamp its AI strategy, yet it still lags behind competitors like OpenAI, highlighting the urgency and challenges the company faces in the AI sector.
- Muse Spark Model Launch: In April 2023, Meta launched the Muse Spark AI model, marking its first foray into proprietary foundation models; however, analysts emphasize that Meta needs to demonstrate the commercial viability of its AI tools to attract paying users and reduce reliance on its advertising business.
- Developer Trust Crisis: Following the failure of the Llama model, Meta's trust among AI developers has diminished, with industry experts suggesting that Wang's team must focus on internal applications rather than third-party developers to avoid further trust issues.
- Executive Pressure and Future Outlook: Despite positive internal feedback for Muse Spark, Wang and his team face high expectations from Zuckerberg to deliver more powerful AI models in the future, aiming to restore investor confidence and drive revenue growth.
See More
Zuckerberg's AI Investment Challenges
- AI Strategy Overhaul: Mark Zuckerberg's investment of over $14.3 billion to bring in Alexandr Wang and his team aims to revamp Meta's AI strategy; however, despite the launch of the Muse Spark model in April, Meta remains behind OpenAI and Google in the AI market, indicating a competitive disadvantage.
- Developer Trust Crisis: Although the launch of Muse Spark marks Meta's first foray into proprietary foundation models, developer trust has waned, with many believing the company has failed to effectively engage external developers following the Llama model debacle, potentially impacting future product adoption.
- Revenue Growth Struggles: Despite reporting a 33% revenue growth in Q1, the fastest rate since 2021, Meta's stock has fallen 18% over the past 12 months, making it the worst performer among tech giants, reflecting market skepticism regarding the commercialization of its AI products.
- Internal Pressure Intensifies: With Meta laying off about 8,000 employees in 2023, morale is low, and the high expectations placed on Wang and his team create immense pressure on Meta to achieve sustainable growth in AI, especially after its virtual reality investments have led to over $80 billion in losses.
See More
IBM Price Target Raised to $315 Amid Strong AI Demand
- Price Target Increase: BofA analyst Wamsi Mohan raised IBM's price target from $300 to $315, indicating an upside potential of over 15%, which reinforces market confidence in IBM's future performance.
- High Yield Stock: With an annual dividend yield of 2.50%, IBM is included among 12 high-yield Fortune 500 stocks, highlighting its appeal to investors seeking stable returns in the current market environment.
- Quantum Computing Investment: IBM announced a $10 billion investment in quantum computing over the next five years, following a letter of intent with the US federal government to establish a quantum chip foundry, enhancing its competitive edge in cutting-edge technologies.
- AI Project Funding: IBM plans to allocate $5 billion towards an AI-linked open-source software project, demonstrating its ongoing commitment to artificial intelligence, although analysts note that some AI stocks may offer greater upside potential.
See More
Salesforce Shares Drop 38.6% Year-to-Date
- Poor Stock Performance: Salesforce's shares fell 2.3% today, marking a year-to-date decline of 38.6%, indicating market concerns over its future growth prospects, which may lead to decreased investor confidence.
- Industry Comparison: As the worst-performing component in the Dow, Salesforce's struggles highlight its relative weakness in the highly competitive cloud computing market, potentially impacting its market share and profitability.
- Other Component Movements: IBM's stock decreased by 2.2%, while Goldman Sachs Group rose by 1.7%, reflecting varied market reactions to different companies, which could influence investors' asset allocation decisions.
- Market Sentiment Analysis: The ongoing decline of Salesforce may raise concerns about the entire tech sector, especially amid increasing economic uncertainty, potentially prompting more investors to reassess their investment strategies.
See More
CrowdStrike Reports Strong Earnings, Significant Stock Upside Ahead
- Strong Financials: CrowdStrike's fiscal Q1 2027 revenue surged 26% year-over-year to $1.39 billion, driven by record annual recurring revenue (ARR) of $5.4 billion, highlighting the company's robust performance in the cybersecurity sector.
- Stock Upside Potential: Analysts are bullish on CrowdStrike's future, with 78% of 54 analysts rating it a buy or strong buy, and an average price target of $712, indicating a potential 10% upside from the current price.
- AI Technology Edge: The Falcon platform leverages AI for advanced threat protection, and as the average cost of data breaches rises, the demand for its services continues to grow, further solidifying its market position.
- Market Recognition: CrowdStrike has been recognized as a Leader in Gartner's Endpoint Protection Magic Quadrant for seven consecutive years and was also named a Leader in the inaugural Cyberthreat Intelligence Technologies Magic Quadrant, underscoring its leadership and execution capabilities in the industry.
See More
CrowdStrike Stock Potential Analysis
- Stock Price Upside: CrowdStrike's stock has surged 362% over the past three years, significantly outperforming the S&P 500's 71% return, indicating strong growth potential in the cybersecurity sector that attracts investor interest.
- Strong Financial Performance: In Q1 of fiscal 2027, CrowdStrike reported a 26% year-over-year revenue increase to $1.39 billion, with annual recurring revenue (ARR) rising 24% to $5.5 billion, driving adjusted earnings per share (EPS) up 51% to $1.10, showcasing robust profitability.
- Optimistic Analyst Ratings: As of June, 78% of analysts rated CrowdStrike as a buy or strong buy, with Wall Street's average price target around $712, suggesting a 10% upside from Wednesday's closing price, reflecting market confidence in its future.
- AI and Cybersecurity Integration: CrowdStrike's Falcon platform is deemed critical AI infrastructure, and as AI technology evolves, its leadership in cybersecurity will be further solidified, especially in addressing the escalating threat of data breaches.
See More
