Shares of IBM, one of the largest suppliers of IT solutions, have grown by 32% since the beginning of the year. In terms of growth rate, they outperform all securities of the so-called Magnificent Seven: Alphabet (-8%), Meta (+23%), Microsoft (+18%), Amazon (+1%), Apple (-16%), Tesla (-25%) and Nvidia (+19%). Why do some analysts believe IBM has further growth potential - especially compared to other developers - amid threats from artificial intelligence and geopolitical tensions?

What analysts are saying 

- IBM's software business is highly resilient and "sticky"-clients rarely abandon solutions they've already implemented, Melius Research analysts wrote July 7 in a note that is cited by MarketWatch.  

The growth rate of software developers such as Adobe, Salesforce and Workday will slow, leading to increasing investor frustration with their ability to capitalize on AI, Melius analysts warn. At the same time, they believe there are fewer software developer stocks left that can deliver the kind of reliability that market participants are seeking. The Melius Research team advises buying IBM shares with a target price of $350 - up 20% from the closing price on July 8. 

- Analysts at Wedbush Securities reiterated an "outperform" rating for IBM and raised their target price from $300 to $325, up 12% from the last close. In their assessment, IBM remains a key player in the cloud and AI-centric software sector.

"While the stock's performance in 2025 has been impressive, we believe IBM remains undervalued and is in the early stages of a growth renaissance with artificial intelligence as a key driver," Wedbush analysts said.

Wedbush points out that IBM's generative AI business already exceeds $6 billion, and the company offers more than 70 working AI processes spanning sales, finance, and marketing. At the same time, Wedbush notes that IBM is gearing up for long-term growth in quantum computing: the company plans to release a large-scale Quantum Starling quantum computer with 200 logical qubits in the coming years, and a Quantum Nighthawk chip is expected as early as this year to provide improved quality for real-world quantum applications. According to Wedbush, these initiatives are designed to strengthen IBM's position in the fast-growing, multi-billion-dollar quantum technology segment.

- Analysts at Bank of America on June 18 also left a "buy" recommendation and raised their target price on IBM shares from $290 to $320, which implies a 10.3% upside for the stock.

In its report, Bank of America praises IBM's transformation under CEO Arvind Krishna and CFO Jim Cavanower, which over the past five years has fundamentally changed the company's strategy and given it a strong foothold in the cloud and enterprise AI segments. Analysts note that under the new leadership, IBM is systematically getting rid of unpromising and expensive lines of business while making smart acquisitions such as Apptio, Turbonomic and HashiCorp that expand the company's capabilities in IT optimization, resource management and DevOps tools. This helps reduce time-to-market, improve operational efficiency and create a full-service platform that integrates hardware, software and consulting.

"Despite the recent rally, IBM remains structurally undervalued and underweight in portfolios," the BofA analysts wrote.

This article was AI-translated and verified by a human editor

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