Not your father’s IBM, says Oppenheimer as it starts coverage with outperform
Investing.com -- Oppenheimer initiated coverage of International Business Machines (NYSE: IBM ) with an “Outperform” rating and a $320 price target, citing the company’s transformation into a software-driven business with strong growth potential.
The firm expects IBM to sustain double-digit revenue growth in its software segment, fueled by its Red Hat offerings. It also sees an inflection in consulting growth in the second half of 2025 as companies shift from AI infrastructure investments to application development.
IBM’s growing role in AI, through its watsonx platform and AI-focused Red Hat offerings, provides additional upside, Oppenheimer noted. The firm believes IBM is undervalued relative to its software and tech services peers and should trade at a higher multiple as its business pivot gains recognition.
IBM’s stock remains underappreciated by investors focused on its legacy hardware and services business, Oppenheimer said, arguing that the company’s evolving revenue and margin trajectory warrant a re-rating.