Wedbush maintains an "Outperform" rating on IBM, setting a 12-month price target of $300, following insights from IBM's 2025 Investor Day. The report highlights IBM's strategic focus on hybrid cloud and AI, with the company poised to leverage a significant shift in demand. IBM's AI initiatives, including the GenAl book of business exceeding $5 billion, are central to its growth strategy, with AI expected to drive $4.4 trillion in productivity gains by 2030. The Red Hat acquisition continues to be a key revenue driver, generating approximately $6.5 billion in FY24, while Watsonx is noted for its strong adoption and potential for future growth.
IBM's cost optimization efforts, which have removed $3.5 billion in expenses over the past two years, are aimed at reinvesting in high-growth markets. The company projects a revenue growth of over 5% for FY25, with further expansion anticipated in FY26. Wedbush analysts Daniel Ives and Scott Devitt emphasize IBM's commitment to accretive M&A, stating, "IBM remains committed to adding accretive assets that will be key to driving its hybrid cloud and AI strategies."
IBM's stock closed at $264.46, up 1.43% on February 4, 2025.