Key Stats for IBM Stock
- Price Change: +2.6%
- Current Price: $315
- Advanced Model Price Target: $346
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What Happened?
Shares of International Business Machines Corporation (IBM) climbed 2.6% to close at $315 on Monday, continuing a rally fueled by a fundamental shift in its business model.
The company recently reported Q4 earnings that comfortably beat Wall Street expectations, delivering $19.7 billion in quarterly revenue.
The primary catalyst for the surge is the company’s generative AI “book of business,” which has now cleared the $12.5 billion milestone.
Sentiment was further bolstered by reports that IBM (IBM) is in advanced talks for an $11 billion acquisition of Confluent (NASDAQ:CFLT).
This acquisition would significantly strengthen IBM’s data streaming capabilities, which are essential for real-time enterprise AI applications.
While competitors like Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) battle for raw compute, Big Blue is finding a high-margin niche in hybrid cloud and Sovereign AI.
See analysts’ growth forecasts and price targets for IBM stock (It’s free!) >>>
Is IBM Undervalued Today?
On the latest earnings call, CEO Arvind Krishna emphasized that the company is built for the long-term AI cycle.
He stated: “We believe that this is going to play out over the next 3 to 5 years… the mainframe is an important element in that story.”
CFO Jim Kavanaugh reinforced that the focus on efficiency and cash flow is paying off.
He noted: “Our performance in 2025 reinforced our confidence on the next chapter of our growth.”
The company exited the year with a $4.5 billion annual run rate in productivity savings, which management intends to reinvest into further AI growth.
Read the full IBM Transcript on TIKR to see the $12.5B AI Book of Business >>>
According to TIKR’s Advanced Valuation Model, the recent price surge still leaves significant room for appreciation.
- Advanced Model Price Target: $346
- Current Price: $315
- Potential Upside: +10.0%
The investment case for IBM (IBM) has transformed from a “legacy dividend play” into a legitimate AI infrastructure story.
The model suggests that the market is still catching up to IBM’s fundamental structural shift toward software.
- The Fair Value Gap: At $315, the stock is trading at a discount to its $346 intrinsic value, offering a rare entry point for a Blue Chip AI play.
- The Growth Reality: The model assumes a 4.4% Revenue CAGR through 2030, a conservative baseline given that software segments grew at 9.0% last year.
- The Profitability Check: The model targets an 18.0% Net Income Margin, driven by the high-margin shift toward AI software and consulting.
If IBM (IBM) successfully integrates Confluent (NASDAQ:CFLT), it could further accelerate the intrinsic value gap toward the bull case.
Conclusion: The enterprise AI turnaround is real. With the generative AI book of business clearing $12.5 billion and a valuation model pointing to **$346**, IBM stock offers a compelling mix of legacy stability and high-margin growth.
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How Much Upside Does IBM Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
