IBM stock surged on Monday after Barclays initiated coverage with a bullish outlook for the storied tech giant. <\/p>\n
The stock jumped 10%, extending gains from last week. Barclays analysts’ bull case doesn’t rest on IBM’s quantum computing potential, but instead a recently unloved area of the tech software.<\/p>\n
“Our core thesis is that IBM has created a stable growth engine around its very defensible software portfolio. This creates solid future growth but also better margins,” the analysts wrote, adding, “Quantum represents a very interesting option value with IBM being an early leader.” <\/p>\n
The note marked Barclay’s initiation of coverage with an overweight rating and a $350 price target, a roughly 11% upside from where the stock opened Monday’s session.<\/p>\n
IBM’s recent stock rally erases SaaSpocalypse losses<\/p>\n
IBM’s gain on Monday adds to the double digit rally last week. Shares surged nearly 13% on the final trading day of May. A regulatory filing from the company<\/a> showed IBM plans to invest $10 billion into quantum computing in the next five years. The news helped to spur more bullishness following an investment from the Trump administration<\/a> as part of a push to bolster US quantum capabilities. <\/p>\n The recent rally has helped erase 2026 losses, pushing the stock up 10% year to date. IBM was hit hard by the “SaaSpocalypse<\/a>,” which tanked many software stock on fears that AI would disrupt the industry. <\/p>\n Barclays pushed back on that narrative, with analysts saying they view IBM’s software exposure as a positive, not a negative.<\/p>\n “While software has a negative investor connotation at the moment, IBM is offering infrastructure software (the good part) to large, often heavily regulated customers, which creates a very sticky set-up that should not see negative AI implications,” the analysts wrote.<\/p>\n “We see mid single digit organic revenue growth and ongoing margin leverage, which should create a stable earnings compounder with a Quantum option – a good combination and hence our Overweight rating,” they added.<\/p>\n The firm compared IBM’s quantum potential to Nvidia’s GPU dominance. <\/p>\n “Quantum computing has the potential to become the next major compute paradigm, following the CPU and GPU eras,” the note read.<\/p>\n Trump’s 2025 IBM shout out makes the rounds<\/p>\n Another factor contributing to investor interest in IBM is a 2025 video of US President Trump recirculating on social media.<\/p>\n Trump praised IBM CEO Arvind Krishn as “a legend” in a White House business roundtable at the end of last year. <\/p>\n “He’s taken the stock from a rather low price to a very nice price. I won’t say high because I’m sure you’re going to say it’s going to go up a lot more, right?,” the president said on December 20, 2025<\/a> to IBM’s CEO.<\/p>\n A clip recirculated on X<\/a> and Reddit<\/a>, with user posts saying Trump said the stock is “going to go up a lot more.”<\/p>\n Trump investment account has bought IBM shares in recent months, according to recent legal filings<\/a>. <\/p>\n