A few months ago, International Business Machines (IBM) looked like collateral damage in the artificial intelligence boom.
Investors worried that the very technology powering the AI rally could quietly chip away at the businesses that have funded Big Blue for decades.
That worry has faded fast, and one of Wall Street’s loudest tech voices now says the recovery has further to run.
The real question is whether the catalysts behind that call can actually hold up.
Wedbush lifts its IBM stock price target to $350
Wedbush raised its price target on IBM to $350 from $320 on June 2 and kept its Outperform rating, Seeking Alpha reported, pointing to what it called “incremental positives” from AI.
The new figure sits roughly 15% above where shares traded that week, Barchart noted, and analyst Dan Ives framed IBM’s blend of software, consulting, and infrastructure as a self-reinforcing “business flywheel.”
Ives has spent the year arguing that the enterprise AI buildout is still early, a case he repeated in an interview with TheStreet.
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The AI scare that knocked down IBM stock
Rewind to late February. IBM shares fell 13% in a single session after Anthropic said its Claude model could help modernize old COBOL code.
COBOL is the decades-old programming language still running many banks and government systems.
The fear was simple. If AI could rewrite that code cheaply, IBM’s mainframe and consulting work might shrink.
Related: Barclays sets eye-catching IBM stock price target
Wedbush pushed back, arguing AI would speed up modernization projects rather than replace them, and those fears have largely dissipated. The firm now calls the episode the “AI Ghost Trade.”
The numbers gave the bulls cover. In the first quarter of 2026, revenue rose 9% to $15.9 billion, and earnings climbed 19%, according to IBM’s quarterly results.
Software now anchors the model after years of CEO Arvind Krishna steering IBM toward AI.
Inside IBM’s AI engine: watsonx, Confluent, and real savings
Ives’s confidence rests on what IBM has built, not slideware. The core is watsonx.data, a system that pulls a company’s scattered information into one place so AI can use it.
IBM says connecting AI agents to that data is 40% more accurate than standard methods, according to IBM.
The company has reinforced that platform through acquisitions, including a roughly $11 billion deal to buy data-streaming firm Confluent, Yahoo Finance reported.
Signals Wedbush is tracking:
- IBM’s generative AI book reached about $4 billion in annual recurring revenue, with 80% of new backlog coming from clients it had not served before, Benzinga reported.
- IBM’s Agent Catalog now offers more than 200 prebuilt AI agents, Barchart noted, so clients do not have to build from scratch.
- IBM says it has banked $4.5 billion in internal productivity savings since 2023 and is targeting $1 billion more this year.
Where IBM stock goes next: quantum, risks, and how it stacks up
IBM is also leaning hard into quantum computing, where machines could eventually solve problems regular computers cannot.
More AI Stocks:
- Wedbush resets Oracle stock price target for the rest of 2026
- White House makes bold $2 billion bet on quantum stocks
- 5-star analyst resets Google stock price target on key move
The company is investing more than $10 billion over five years, TipRanks reported, and is building a quantum chip plant called Anderon with the U.S. Commerce Department, with each side committing $1 billion. That news lifted the stock 8%.
Ives sees IBM in the early innings of pairing AI with quantum, and management still aims to deliver its first large-scale fault-tolerant quantum machine by 2029.
How IBM stacks up, and what could still go wrong
For all the momentum, IBM has trailed the market it is supposed to be leading. The stock is up about 5% in 2026, while the S&P 500 has gained roughly 11% through May, according to U.S. News.
It touched record highs in early June, then fell about 6% on June 3 as higher oil prices and rising Treasury yields squeezed corporate tech, StockStory reported.
What still has to go right for the bull case:
- Consulting growth needs to reaccelerate after rising just 4% last quarter, far behind software and infrastructure.
- The generative AI book has to keep compounding as pilots turn into large, paid deployments.
- IBM must prove the COBOL fear was overblown, not merely delayed, a risk 24/7 Wall St. still flags if its AI book or mainframe demand stalls.
- Quantum milestones have to land close to schedule, not slip.
The bottom line for IBM investors
Wedbush’s $350 target is a bet that IBM’s AI and quantum push is earning real revenue, not just headlines, and the early numbers back that up.
Still, the stock trades near record highs at a premium price, so the margin for disappointment is thin.
Buying here means paying up for execution that has to keep showing up, quarter after quarter.
Related: IBM CEO sends strong message on quantum computing