International Business Machines (IBM) stock extended its gain on June 1 after Barclays analyst Raimo Lenschow initiated coverage of the AI infrastructure firm with an “Overweight” rating.
In his research note, Lenschow told clients that IBM could be trading at $350 by year-end, a bullish price target that signals potential upside of nearly 10% from current levels.
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Barclays’ constructive view on IBM shares is particularly significant given they’re already up a remarkable 45% versus their year-to-date low.
The Bull Case for IBM Stock
Lenschow’s bullish thesis on IBM stock rests mostly on its massive leap into quantum computing.
Last week, the company announced plans to invest more than $10 billion in quantum computing over the next five years as part of its broader commitment to launching a large-scale commercial quantum system by 2029.
This disclosure came shortly after the U.S. government awarded IBM with $1 billion in funding to accelerate quantum computing development.
IBM then pledged to contribute another $1 billion to establish a new spinout, Anderon, which will oversee the construction and operation of the new quantum infrastructure.
In his report, the Barclays analyst framed this as a strategic option on what could become the next major computing paradigm.
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According to Lenschow, IBM is following Nvidia’s (NVDA) playbook in the quantum market — building the software tools and developer ecosystem needed to drive mass adoption.
“IBM has a compelling opportunity ahead around quantum computing that could accelerate growth if successful,” he added.
In Barclays’ most optimistic bull case, IBM shares could reach $449, which would represent a 40% return from current levels, on top of a 2.11% dividend yield.
Note that IBM currently sits firmly above its key moving averages (MAs), with an RSI in the early 80s, reinforcing a very strong uptrend, unlikely to subside without a meaningful catalyst.
How Wall Street Recommends Playing IBM
Other Wall Street analysts also agree with Lenschow’s bullish thesis on IBM stock, believing its software business is much less exposed to AI disruption than some of its enterprise peers as well.
