IBM shares jumped nearly 8% in Monday premarket trading after Barclays began coverage of the company with an Overweight rating and a $350 price target. The call implies about 17.5% upside from IBM’s previous close and gave the stock fresh momentum after a strong run in May.
For shareholders, the move landed just as IBM stock was already back in favor. The company surged nearly 30% in May, its best monthly performance in nearly 24 years, and retail traders were again talking up a possible sprint to $400 on Stocktwits, where sentiment around the shares was described as extremely bullish.
Raimo Lenschow said IBM’s infrastructure software serves large, highly regulated enterprises, the kind of customers that tend to stay put once they are embedded in a system. Barclays also said nearly half of IBM’s revenue and most of its profit come from software, and it expects that mix to keep tilting further toward software as the segment grows faster than the rest of the business.
That matters because the bullish case now rests on more than just the company’s existing software base. IBM last week said it would invest more than $10 billion in quantum computing over the next five years, target a large-scale commercial quantum system by 2029, and add another $1 billion to help form a new spinout, Anderon, which will oversee a quantum wafer fabrication facility. The U.S. government also unveiled $1 billion in funding to accelerate IBM’s quantum work, adding weight to a bet that still sits alongside a revenue engine dominated by software.
That is the friction point for investors weighing IBM stock now: the company is being priced not only on steady earnings growth and continued margin expansion, but also on quantum-computing hopes that are still years from commercialization. Barclays sees mid-single-digit organic revenue growth ahead, but the next leg of the stock will likely depend on whether IBM can keep delivering in software while turning its quantum spending into something more than a long-dated promise.
