International Business Machines Corp. (NYSE: IBM) is gaining momentum on Wall Street as investor confidence in its AI leadership strengthens. The stock recently traded at $272.13, just below its 52-week high of $275.26.
Despite a recent 3% stake reduction by Handelsbanken Fonder AB, major firms like Vanguard and Capital World Investors increased their holdings. Capital World’s position in IBM jumped more than 400% in Q4 2024.
IBM’s Q1 2025 earnings beat expectations, with EPS at $1.60 and revenue of $14.54 billion, slightly above forecasts. The company also raised its dividend to $1.68 per share, offering a 2.47% yield. However, the 115% payout ratio has raised questions about sustainability.
A new global survey by IBM shows that AI-enabled workflows could grow 8x by 2025, driven by agentic AI. 69% of executives said improved decision-making is the top benefit, while 64% of AI budgets are now used for core business functions—not experiments.
IBM is aligning its business around these trends. The company’s hybrid cloud and AI-first strategy is helping clients reimagine processes across supply chains, HR, and operations. The report also notes that companies using an “AI-first” model attributed over 50% of their revenue growth to AI in the past year.
Analyst sentiment remains mixed. IBM holds a “Hold” rating, with an average target of $250.31. However, some analysts like Wedbush and Citigroup rate it “Outperform”, with targets up to $300.