Wedbush lifts IBM price target to $350 as AI momentum solidifies

Wedbush Securities has raised its price target for International Business Machines (IBM) to $350 from $320, maintaining an Outperform rating on the technology giant. The firm’s analyst, Dan Ives, cited "incremental positives" from artificial intelligence as the primary driver for the upgrade, which was announced on June 2. The new target sits approximately 15% above the share price recorded that week, reflecting growing confidence in the company’s strategic pivot.

The decision comes after a period of market uncertainty where investors feared AI technologies might erode IBM’s traditional mainframe and consulting revenue streams. That concern, which Ives dubbed the "AI Ghost Trade," has largely dissipated following strong financial performance. In the first quarter of 2026, IBM reported a 9% increase in revenue to $15.9 billion and a 19% rise in earnings, providing tangible data to support the bullish outlook.

Ives described IBM’s combination of software, consulting, and infrastructure as a "self-reinforcing business flywheel." Central to this model is watsonx.data, a platform designed to consolidate scattered corporate information for AI utilisation. IBM claims that connecting AI agents to this data yields 40% greater accuracy than standard methods. The company has bolstered this capability through strategic acquisitions, including an approximately $11 billion deal to acquire data-streaming firm Confluent.

Generative AI has become a significant revenue contributor, with annual recurring revenue reaching approximately $4 billion. Notably, 80% of new backlog in this segment comes from clients previously unserved by IBM. The firm’s Agent Catalog now offers more than 200 prebuilt AI agents, allowing enterprises to deploy solutions without building from scratch. Additionally, IBM has recorded $4.5 billion in internal productivity savings since 2023 and aims to secure a further $1 billion in savings this year.

Beyond software, IBM is making substantial commitments to quantum computing, investing more than $10 billion over five years. This includes a $1 billion contribution to build the Anderon quantum chip plant alongside the U.S. Commerce Department. Management targets the delivery of its first large-scale fault-tolerant quantum machine by 2029, a milestone that could further integrate with its AI offerings.

Despite the upgrade, IBM’s stock performance in 2026 has lagged behind the broader market. Shares have risen approximately 5% this year, compared to a roughly 11% gain for the S&P 500 through May. The stock touched record highs in early June before falling about 6% on June 3, pressured by rising Treasury yields and higher oil prices.

Challenges remain, particularly in the consulting segment, which grew by just 4% in the last quarter, trailing the software and infrastructure divisions. Investors will be watching to see if generative AI pilots convert into large-scale paid deployments and whether quantum milestones are met on schedule. Wedbush’s $350 target reflects a bet that IBM’s execution will continue to outpace the premium valuation currently attached to the shares.