JPMorgan analyst Brian Essex upgraded IBM to ‘Overweight’ from ‘Neutral’ and also raised the price target on the stock to $291 from $270
- JPMorgan noted that if IBM succeeds in becoming a significant beneficiary of the growing AI demand, then there could be room for multiple expansion for the stock.
- Morgan Stanley has also hiked its price target on IBM to $267 from $225.
- IBM is set to benefit from Trump’s directives to boost the domestic quantum computing space.
Shares of IBM (IBM) climbed nearly 4% premarket on Tuesday after the tech giant received a fresh bull case from JPMorgan, citing greater confidence in the stock on the back of expected software acceleration in the second half of 2026.
JPMorgan analyst Brian Essex upgraded IBM to ‘Overweight’ from ‘Neutral’ and also raised the price target on the stock to $291 from $270, according to TheFly.
IBM Rides on AI-Optimism
The analyst highlighted tailwinds from Red Hat and OpenShift migration. Essex also pointed towards OpenShift’s boost to the company’s growing AI-driven container platform adoption among enterprises and noted automation acceleration as the acquisition of HashiCorp has gained traction from senior management, stating that HashiCorp is tapping ‘increasing C-suite sponsorship.’
JPMorgan also noted that if IBM succeeds in becoming a significant beneficiary of growing AI demand, there could be room for multiple expansions in the stock. This comes even as new U.S. quantum initiatives offer an additional tailwind.
Morgan Stanley has also raised its price target on IBM to $267 from $225, representing an 18% increase from its previous target, and has kept an ‘Equal Weight’ rating on the stock.
The firm noted that Dell and HPE earnings numbers have shown how enterprise server demand is far more rigid than expected, even after a significant price hike driven by compute shortages, refresh activity, and growing AI-related infrastructure requirements.
Morgan Stanley also said that Wall Street expectations for 2026 and 2027 ‘look too low’ and raised its earnings per share estimates 5% to 6% for the stocks with compute exposure.
The Quantum Computing Boost
Arvind Krishna, Chief Executive Officer at IBM, was present at the White House when President Trump signed two executive orders that directed the acceleration of domestic quantum computing development and protected the government from any potential national security breaches.
Both directives aim to deliver an operational quantum computer for scientific discovery by 2028 and to require all federal agencies to equip their cybersecurity defenses with this technology to withstand quantum-powered attacks by 2031.
What Retail Thinks Of IBM
On Stocktwits, retail sentiment surrounding the stock has remained ’bearish,’ amid ‘normal’ message volumes in the past 24 hours.
IBM stock has declined by more than 13% so far this year.
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