IBM Stock Jumps Pre-Market As Analysts Boost Price Targets On AI-Driven Growth In Q4: Retail Bets On Telefonica Quantum Boost

International Business Machines Inc. (IBM) stock rocketed over 9% in pre-market trading on Thursday as retail sentiment remained ‘bullish’ on Stockwits after the tech infrastructure giant reported a fourth-quarter earnings beat, driven by growth in software and artificial intelligence-related demand.

The shares were also helped by news of IBM’s partnership with Telefonica Tech, a subsidiary of Spanish telecom giant Telefónica, to develop quantum-safe security solutions. 

The collaboration aims to identify and address cryptography vulnerabilities and protect critical infrastructure from future quantum computing threats.

If pre-market gains hold, IBM’s shares are poised to open at their highest levels in over a month. 

The company’s earnings per share (EPS) came in at $3.92, exceeding the $3.78 consensus forecast from Koyfin. 

Revenue was $17.55 billion, up 1% year-over-year, slightly below Wall Street’s expectation of $17.56 billion.

IBM’s earnings prompted a wave of price target hikes from major firms, including RBC Capital, Bank of America (BofA), Stifel, Morgan Stanley, JPMorgan, and Jefferies, according to TheFly.

RBC Capital made the most aggressive move, raising its target by $26 to $276, maintaining an ‘Outperform’ rating. 

The brokerage cited IBM’s strong free cash flow, GenAI bookings, and Red Hat growth, which exceeded expectations and positioned the company well for 2025.

Morgan Stanley and JPMorgan took a more cautious stance, increasing their targets by $11 to $228 (‘Equal Weight’) and $244 (‘Neutral’), respectively. Both noted impressive software growth and better-than-expected free cash flow.

IBM Sentiment and Message Volume on Jan.30 as of 8:40 a.m. ET | Source: Stocktwits

On Stocktwits, retail sentiment around IBM surged further into the ‘bullish’ zone as chatter remained at ‘extremely high’ levels. 

One user anticipates that IBM could surge to a new all-time high if Thursday’s pre-market rally continues through the day.

Many were bullish on the stock’s performance, given its link to quantum technology.

IBM’s software segment saw a 10% revenue increase, helping to offset declines in its infrastructure and consulting divisions. 

The infrastructure segment, which includes cloud servers and storage, posted lower sales, while the consulting unit—where IBM has been pivoting toward high-value AI and cloud projects—also underperformed.

Despite these weak spots, IBM executives emphasized a strong demand for AI-related services.

“We closed the year with double-digit revenue growth in software, led by further acceleration in Red Hat,” CEO Arvind Krishna said. 

“Clients globally continue to turn to IBM to transform with AI. Our generative AI book of business now stands at more than $5 billion, up nearly $2 billion quarter-over-quarter,” he added.

IBM’s stock has gained nearly 22% over the last year, with gains of 3% so far in 2025. 

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