Analysts Project Significant Upside for IBM Stock Amid AI Transformation

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While sometimes perceived as a legacy technology firm, International Business Machines (IBM) is currently undergoing a substantial reinvention, driven by an aggressive artificial intelligence strategy. This shift, fueled by strategic acquisitions and a growing order backlog, is drawing increased attention from Wall Street. In a recent move, analysts at investment firm Jefferies have issued a notably bullish assessment of the company's prospects.

The positive sentiment stems primarily from a fresh analysis by Jefferies. On January 7, the firm upgraded its rating on IBM shares to "Buy" and significantly raised its price target from $300 to $360. Based on a recent trading price around $296, this new target implies an approximate upside potential of 21 percent for the stock.

This optimistic outlook is supported by recent operational developments. A study released in collaboration with the National Retail Federation (NRF) indicates that 45 percent of global consumers are already utilizing generative AI for shopping. These figures validate IBM's strategic emphasis on AI solutions for the retail sector and the expansion of its watsonx platform. Furthermore, the renewal of its technology partnership with Wimbledon highlights the practical application and relevance of IBM's offerings.

Financial Performance and Strategic Acquisitions

Financially, the corporation stands on solid ground. IBM's share price had already advanced roughly 35 percent in 2025, outperforming the broader market. A key driver has been the surge in AI-related bookings, which nearly doubled to $9.5 billion by the third quarter.

Analysts view these developments within the context of the company's ongoing restructuring. In December 2025, IBM announced the planned acquisition of Confluent for approximately $11 billion, aiming to build an integrated "Smart Data Platform" for enterprise clients. This purchase directly addresses the data management challenges faced by many corporate customers.

Upcoming Earnings in Focus

Investors' attention now turns to the next major milestone. IBM is scheduled to report its fourth-quarter and full-year results on January 28, 2026. Market consensus anticipates a revenue jump to $19.21 billion, with earnings per share projected at $4.33.

Moving forward, the critical factors for achieving the new price target will be the successful integration of the Confluent acquisition and the conversion of the substantial order backlog into recognized revenue in the coming quarters.