IBM Stock Has 28% Upside, Says Analyst. Now Could Be the Time to Buy.

IBM's stock has been on a rollercoaster ride in recent years, but a recent analyst report suggests that the tech giant may be poised for a significant upswing. According to the report, IBM stock has the potential for a 28% upside, making now an opportune time for investors to consider buying the stock. But what factors contribute to this prediction, and how reliable are they in the long term?



One of the primary factors driving the analyst's prediction is IBM's strong earnings growth. The company has consistently surpassed analysts' earnings expectations in the past four quarters, with its non-GAAP EPS of $3.92 for the last reported quarter surpassing the Street's expectations by 5.1%. This trend indicates that IBM is performing well and may continue to do so in the future.

Another key factor is IBM's growth in the software segment, which includes cloud and AI solutions. In the fourth quarter of 2024, the software segment's revenues increased by 10.4% year-over-year to $7.9 billion. This growth is expected to continue, as businesses increasingly adopt cloud and AI technologies.

IBM's strategic partnerships and acquisitions have also contributed to its growth potential. The company's partnerships with AWS, Adobe, and Microsoft have enabled it to offer end-to-end solutions that address clients' business challenges, accelerate growth, and scale enterprise use of AI. Additionally, IBM's acquisition of Applications Software Technology has expanded its Oracle solutions capabilities, further enhancing its offerings.

Investment in AI and quantum computing is another factor that positions IBM well for the future. The company's focus on these technologies, such as the IBM Quantum Network and the development of AI solutions like DeepSeek, is expected to pay off as these technologies become more prevalent.



However, the reliability of these factors in the long term depends on several factors, including IBM's ability to maintain its competitive edge, adapt to changing market conditions, and execute on its strategic initiatives. Additionally, external factors such as the overall economic environment and technological advancements can impact IBM's performance.

In conclusion, IBM's stock has the potential for a 28% upside, driven by factors such as strong earnings growth, growth in the software segment, strategic partnerships and acquisitions, and investment in AI and quantum computing. While these factors suggest a positive outlook for IBM stock, investors should continue to monitor the company's progress and the broader market trends.