IBM’s AI-fueled comeback is just getting started

IBM might not be the first company that comes to mind when you hear “AI powerhouse.” But in 2025, Big Blue is busy showing it might just be the most underrated player in the AI arms race.

A new research note from Wedbush Securities is the latest vote of confidence. Wedbush analysts raised their price target for IBM stock from $300 per share to $325, calling the company “one of our top software names to own” and “still under owned.” IBM is one of the 30 companies in Wedbush analyst Dan Ives’ recently launched ETF that tracks AI stocks.

Despite a strong run this year — IBM stock is up about 28% so far in 2025 — Wedbush says the company is in the “early stages of a renaissance of growth,” powered largely by its $6 billion (and growing) generative AI business.

The bullish case hinges on what IBM has quietly built: an AI platform that’s already threaded through more than 70 enterprise workflows, from sales and finance to marketing and IT. Its flagship WatsonX platform, originally launched as a reimagining of the Watson AI brand, has evolved into a serious contender in the generative AI platform wars. IBM is at the forefront of quantum computing. And thanks to its hybrid cloud muscle (see: Red Hat and OpenShift), IBM is well-positioned to meet enterprise clients where they are, especially as analysts expect three-quarters of AI applications to run on containers by 2027.

“Built on a scalable and open foundation, IBM can continuously innovate at rapid pace while leveraging the developer community to capitalize on the current opportunity ahead across both hybrid cloud and AI,” Wedbush analysts led by Ives wrote in their note Friday.

That hybrid strategy is core to IBM’s thesis. 

While Microsoft and Google battle it out over copilots and consumer hype, IBM is embedding AI into the nuts and bolts of enterprise software. According to Wedbush’s field checks, demand for IBM’s AI agents and developer tools is strong and accelerating. Clients are looking not just to experiment, but to operationalize AI at scale — and they’re turning to IBM to help map out those use cases.

Meanwhile, the company isn’t taking its foot off the gas.

IBM continues to integrate recent acquisitions such as HashiCorp to strengthen its developer ecosystem, and it’s placing long-term bets in frontier tech. The company recently unveiled its roadmap for “Quantum Starling,” a large-scale, fault-tolerant quantum computer that is expected by 2030. A chip, dubbed Quantum Nighthawk, is due later this year and promises meaningful gains in connectivity and fidelity — critical for real-world quantum applications.

“While still in the early stages of playing out," Wedbush analysts wrote, "IBM is taking this multi-billion-dollar quantum computing industry head-on by providing improved software and hardware capabilities to create increased use cases for various sectors.”

IBM chief executive Arvind Krishna’s long game appears to be positioning IBM not just as a consumer-facing AI brand, but as the backbone for the next generation of enterprise infrastructure. That’s not as flashy as chatbot demos or viral product launches — but it might be more lucrative.

The company is also bucking broader macro trends. While many tech firms have seen enterprise spending slow or shift amid budget pressures, IBM told investors that it hasn’t seen a pullback in customer appetite across its portfolio. Instead, the company says clients are leaning in — investing more deeply in cloud and AI as strategic priorities rather than line-item expenses.

If IBM’s momentum holds, the company could finally be entering the “growth company” phase it’s been chasing for over a decade. The AI boom may have many winners, but Big Blue’s steady, platform-centric approach has made it one to watch — especially if a $325 stock price target becomes less of a ceiling and more of a floor.