Oppenheimer: Wall Street Fails to Recognize IBM's Transition Value
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 21 2025
0mins
Should l Buy IBM?
Source: CNBC
Investment Outlook: Oppenheimer has initiated coverage of IBM with an outperform rating and a price target of $360, suggesting a 24% upside due to anticipated growth in its software portfolio.
Software Growth: Analyst Param Singh forecasts a 10% compound annual growth rate for IBM's software segment over the next two years, driven by strengths in automation and Red Hat.
Consulting Revenue Recovery: IBM's consulting revenue showed positive growth in Q3 2025, with expectations for low single-digit growth moving forward, as organizations leverage AI infrastructure.
Margin Expansion: Singh believes that IBM's transition to a software-centric model will lead to higher gross and pre-tax margins, justifying a re-rating of the stock to align with industry averages.
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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: 242.010
Low
210.00
Averages
315.80
High
375.00
Current: 242.010
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.
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- Investor Focus on AI Transition: Following the layoff announcement, Block's stock surged by 16.8%, suggesting market expectations for improved efficiency through layoffs and AI transitions, which may encourage other tech companies to adopt similar strategies.
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- Limitations of AI Code Generation: While AI-generated code often performs well, studies indicate it has a 60% higher error rate compared to human-written code, leading many institutions that rely on stability to be cautious about upgrading, potentially delaying the adoption of new technologies.
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