Wall Street Analyst Rating Updates
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy IBM?
Source: seekingalpha
- Google Rating Upgrade: Wells Fargo upgraded Alphabet (GOOGL) from Equal Weight to Overweight, projecting its Gemini consumer subscription revenue to reach $12 billion by 2027, reflecting strong confidence in its AI potential, with the price target raised from $354 to $387.
- Cable Companies Downgrade: BNP downgraded Comcast (CMCSA) and Cable One (CABO) from Neutral to Underperform due to fiber expansion eroding market share, with CMCSA's price target cut to $27 and CABO's to $80, indicating a pessimistic outlook on future revenue.
- IBM Rating Upgrade: UBS upgraded IBM (IBM) from Sell to Neutral, citing a more balanced risk/reward profile with a price target of $236, acknowledging competitive risks from AI but emphasizing customer stickiness and a complex vertically integrated platform supporting its infrastructure business.
- First Solar Downgrade: Baird downgraded First Solar (FSLR) from Outperform to Neutral, lowering the price target from $264 to $205 due to management's concerning comments on future outlook, despite a strong backlog position, indicating caution in booking new business.
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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.
Anthropic's AI Threatens IBM's Core Business
- Market Reaction: IBM's stock plummeted over 12% on Monday as Anthropic's AI coding platform Claude was perceived as a threat to its core business, indicating investor concerns about the future of its traditional mainframe operations.
- Technology Comparison: While Claude can modernize complex COBOL programs, it has a 60% higher error rate in generated code, suggesting that AI has not yet reached an ideal level of reliability in programming, which may lead clients to question its dependability.
- Mainframe Advantages: IBM's new mainframe systems can handle 450 billion AI inferences per day, showcasing their superiority in high-performance computing and security, potentially positioning them as future workhorses in the AI industry.
- Positive Market Outlook: Despite AI competition, the global mainframe market is projected to grow at an average annual rate of nearly 8% through 2033, with IBM's leadership in this sector providing a solid foundation for future stable growth.
See More
Wall Street Analyst Rating Updates
- Google Rating Upgrade: Wells Fargo upgraded Alphabet (GOOGL) from Equal Weight to Overweight, projecting its Gemini consumer subscription revenue to reach $12 billion by 2027, reflecting strong confidence in its AI potential, with the price target raised from $354 to $387.
- Cable Companies Downgrade: BNP downgraded Comcast (CMCSA) and Cable One (CABO) from Neutral to Underperform due to fiber expansion eroding market share, with CMCSA's price target cut to $27 and CABO's to $80, indicating a pessimistic outlook on future revenue.
- IBM Rating Upgrade: UBS upgraded IBM (IBM) from Sell to Neutral, citing a more balanced risk/reward profile with a price target of $236, acknowledging competitive risks from AI but emphasizing customer stickiness and a complex vertically integrated platform supporting its infrastructure business.
- First Solar Downgrade: Baird downgraded First Solar (FSLR) from Outperform to Neutral, lowering the price target from $264 to $205 due to management's concerning comments on future outlook, despite a strong backlog position, indicating caution in booking new business.
See More
Block's 40% Layoff Shakes Tech Industry
- Unprecedented Layoff: Block's announcement of over 40% layoffs aims to leverage AI tools for enhanced efficiency, and while some investors express concern, this move could significantly improve operational efficiency and financial health.
- Positive Market Reaction: Despite a 1.3% drop in the iShares Expanded Tech-Software ETF following Block's news, the company's stock surged 16.8%, indicating a favorable investor response to layoffs, which may signal increased demand for similar actions across the industry.
- Widespread Industry Impact: Block's decision to lay off a large portion of its workforce may prompt other tech companies to follow suit, particularly as AI technology drives firms to optimize cost structures and enhance competitive positioning.
- Restoration of Investor Confidence: Following layoffs among major tech firms at the end of 2022 and early 2023, the market began to recover, and Block's actions could further bolster investor confidence in tech stocks, potentially leading to an overall industry rebound.
See More
Block's Mass Layoffs Trigger Software Stock Plunge
- Staggering Layoff Announcement: Block's decision to lay off over 40% of its workforce aims to enhance efficiency through AI tools, although this has raised concerns about the future of the software industry, leading to a widespread decline in software stocks.
- Severe Market Reaction: The news from Block caused the iShares Expanded Tech-Software ETF to drop by 1.3%, with a peak decline of 3% on Friday, indicating investor sensitivity and panic regarding layoffs in the software sector.
- 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.
- Widespread Industry Impact: Block's layoffs could trigger a wave of similar actions across the software industry, as investors generally believe that workforce reductions will enhance profitability, especially in the current economic climate where software companies allocate nearly all their revenue to employee costs.
See More
Traditional 'Quality' Stocks Slump as AI Threatens Industry Moats
- Quality Stocks Underperform: In February, the traditionally safe 'Quality' stocks lagged behind 'Value' counterparts by over 5 percentage points, marking the worst performance in five years, indicating a significant loss of investor confidence in high-valuation companies due to AI threats.
- Shift to Fundamental Assets: As concerns over traditional high-valuation companies grow, investors are rotating from 'future-growth' tech stocks to firms with physical infrastructure, such as Coca-Cola, reflecting a preference for assets with lower risks of technological displacement.
- Momentum Trade Warning Signs: Analysts have noted a weak correlation between recent market winners and traditional earnings revisions, leading to warnings for the 'Momentum' trade, as investors focus on companies' defensive capabilities against the AI revolution, giving rise to the 'HALO' trade trend.
- Surge in ETF Inflows: Amid rising uncertainty, ETFs focusing on immediate cash returns, dividends, and buybacks have seen an influx of $7 billion this month, indicating a drastic decline in interest for long-term bets and a shift towards a concentrated AI risk investment strategy.
See More
IBM Faces AI Threat but Remains Optimistic About Future
- Market Overreaction: IBM's stock plummeted over 12% on Monday as Anthropic's AI platform Claude was perceived as a threat to its core business, indicating that the market's reaction may have been excessive and overlooked IBM's existing strengths in COBOL modernization solutions.
- COBOL Modernization Tools: IBM has long offered COBOL modernization tools that facilitate the migration of legacy systems to more modern platforms like Linux or Windows, which is a crucial part of IBM's future transformation strategy, showcasing the company's foresight in technological evolution.
- 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.
- Enduring Mainframe Advantages: IBM's new mainframe systems can handle 450 billion AI inferences per day, demonstrating their speed and security in managing complex tasks; despite the potential of AI technology for modernization, mainframes still hold irreplaceable advantages in many critical areas.
See More
Anthropic's AI Threatens IBM's Core Business
- Market Reaction: IBM's stock plummeted over 12% on Monday as Anthropic's AI coding platform Claude was perceived as a threat to its core business, indicating investor concerns about the future of its traditional mainframe operations.
- Technology Comparison: While Claude can modernize complex COBOL programs, it has a 60% higher error rate in generated code, suggesting that AI has not yet reached an ideal level of reliability in programming, which may lead clients to question its dependability.
- Mainframe Advantages: IBM's new mainframe systems can handle 450 billion AI inferences per day, showcasing their superiority in high-performance computing and security, potentially positioning them as future workhorses in the AI industry.
- Positive Market Outlook: Despite AI competition, the global mainframe market is projected to grow at an average annual rate of nearly 8% through 2033, with IBM's leadership in this sector providing a solid foundation for future stable growth.
See More
Wall Street Analyst Rating Updates
- Google Rating Upgrade: Wells Fargo upgraded Alphabet (GOOGL) from Equal Weight to Overweight, projecting its Gemini consumer subscription revenue to reach $12 billion by 2027, reflecting strong confidence in its AI potential, with the price target raised from $354 to $387.
- Cable Companies Downgrade: BNP downgraded Comcast (CMCSA) and Cable One (CABO) from Neutral to Underperform due to fiber expansion eroding market share, with CMCSA's price target cut to $27 and CABO's to $80, indicating a pessimistic outlook on future revenue.
- IBM Rating Upgrade: UBS upgraded IBM (IBM) from Sell to Neutral, citing a more balanced risk/reward profile with a price target of $236, acknowledging competitive risks from AI but emphasizing customer stickiness and a complex vertically integrated platform supporting its infrastructure business.
- First Solar Downgrade: Baird downgraded First Solar (FSLR) from Outperform to Neutral, lowering the price target from $264 to $205 due to management's concerning comments on future outlook, despite a strong backlog position, indicating caution in booking new business.
See More
Block's 40% Layoff Shakes Tech Industry
- Unprecedented Layoff: Block's announcement of over 40% layoffs aims to leverage AI tools for enhanced efficiency, and while some investors express concern, this move could significantly improve operational efficiency and financial health.
- Positive Market Reaction: Despite a 1.3% drop in the iShares Expanded Tech-Software ETF following Block's news, the company's stock surged 16.8%, indicating a favorable investor response to layoffs, which may signal increased demand for similar actions across the industry.
- Widespread Industry Impact: Block's decision to lay off a large portion of its workforce may prompt other tech companies to follow suit, particularly as AI technology drives firms to optimize cost structures and enhance competitive positioning.
- Restoration of Investor Confidence: Following layoffs among major tech firms at the end of 2022 and early 2023, the market began to recover, and Block's actions could further bolster investor confidence in tech stocks, potentially leading to an overall industry rebound.
See More
Block's Mass Layoffs Trigger Software Stock Plunge
- Staggering Layoff Announcement: Block's decision to lay off over 40% of its workforce aims to enhance efficiency through AI tools, although this has raised concerns about the future of the software industry, leading to a widespread decline in software stocks.
- Severe Market Reaction: The news from Block caused the iShares Expanded Tech-Software ETF to drop by 1.3%, with a peak decline of 3% on Friday, indicating investor sensitivity and panic regarding layoffs in the software sector.
- 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.
- Widespread Industry Impact: Block's layoffs could trigger a wave of similar actions across the software industry, as investors generally believe that workforce reductions will enhance profitability, especially in the current economic climate where software companies allocate nearly all their revenue to employee costs.
See More
Traditional 'Quality' Stocks Slump as AI Threatens Industry Moats
- Quality Stocks Underperform: In February, the traditionally safe 'Quality' stocks lagged behind 'Value' counterparts by over 5 percentage points, marking the worst performance in five years, indicating a significant loss of investor confidence in high-valuation companies due to AI threats.
- Shift to Fundamental Assets: As concerns over traditional high-valuation companies grow, investors are rotating from 'future-growth' tech stocks to firms with physical infrastructure, such as Coca-Cola, reflecting a preference for assets with lower risks of technological displacement.
- Momentum Trade Warning Signs: Analysts have noted a weak correlation between recent market winners and traditional earnings revisions, leading to warnings for the 'Momentum' trade, as investors focus on companies' defensive capabilities against the AI revolution, giving rise to the 'HALO' trade trend.
- Surge in ETF Inflows: Amid rising uncertainty, ETFs focusing on immediate cash returns, dividends, and buybacks have seen an influx of $7 billion this month, indicating a drastic decline in interest for long-term bets and a shift towards a concentrated AI risk investment strategy.
See More
IBM Faces AI Threat but Remains Optimistic About Future
- Market Overreaction: IBM's stock plummeted over 12% on Monday as Anthropic's AI platform Claude was perceived as a threat to its core business, indicating that the market's reaction may have been excessive and overlooked IBM's existing strengths in COBOL modernization solutions.
- COBOL Modernization Tools: IBM has long offered COBOL modernization tools that facilitate the migration of legacy systems to more modern platforms like Linux or Windows, which is a crucial part of IBM's future transformation strategy, showcasing the company's foresight in technological evolution.
- 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.
- Enduring Mainframe Advantages: IBM's new mainframe systems can handle 450 billion AI inferences per day, demonstrating their speed and security in managing complex tasks; despite the potential of AI technology for modernization, mainframes still hold irreplaceable advantages in many critical areas.
See More
