IBM (IBM) stock has been on a tear. The company closed at $320.42 on Monday, up 7.6%, marking its highest closing price ever. That pushed IBM’s market cap above $300 billion for the first time.
International Business Machines Corporation, IBM
The stock has now surged nearly 30% over just four trading sessions — its best four-day run on record.
A lot of the recent buzz has centered on quantum computing. The federal government pledged $2 billion to support the domestic quantum supply chain, with the bulk of that going to IBM. The company has also committed more than $10 billion of its own to quantum research and manufacturing over five years.
But analysts making the most bullish calls aren’t really focused on quantum.
Barclays initiated coverage on IBM Monday with an Overweight rating and a $350 price target. Analyst Raimo Lenschow pointed to IBM’s software concentration as the key driver. Software accounts for nearly half of IBM’s revenue and the majority of its profit.
The reasoning: IBM’s software is built for large, heavily regulated enterprises. These customers don’t switch platforms easily. That makes IBM’s revenue base more resilient than it might appear.
This “stickiness” argument has been made by others. Oppenheimer’s Param Singh made the same case back in January. Evercore ISI and Citi both echoed it in the months after that, with Citi noting that IBM’s software and hardware are embedded “across the most critical points of the world’s largest, most complex IT infrastructures.”
Red Hat remains one of the most-watched pieces of the IBM story. The subsidiary brings in roughly a quarter of IBM’s software revenue and 12% of total company sales.
Growth at Red Hat has slowed, dropping from 14% in mid-2024 to 8% by year-end 2025. IBM’s own guidance points to around 10% growth through 2026 as a ceiling.
Melius Research analyst Ben Reitzes thinks Red Hat OpenShift could see a lift from AI workload deployments moving from testing to production. He believes that could push year-over-year growth back into double digits — something he says the market isn’t pricing in.
IBM was also named a partner for Nvidia’s new Vera Rubin AI accelerators. Its role will include system building, cloud services, and AI storage infrastructure.
Dell’s blowout Q1 results — $16.1 billion in AI server shipments and $51.3 billion in committed orders — have also added to the IBM narrative. IBM’s Red Hat OpenShift is the dominant container platform for managing hybrid AI workloads, sitting directly on top of the physical servers Dell ships.
IBM Sovereign Core, launched at IBM’s Think conference in May, lists Dell as a direct ecosystem partner.
IBM is up about 9.2% year-to-date and set a new 52-week high at $318.27 before closing even higher at $320.42.
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