Dan Ives holds his $350 IBM target after a 26% weekly crash, betting the Q2 miss is a timing issue, not structural decay.
HPE surged 92% year to date on AI networking demand while Oracle cratered 31% in a month, carrying nearly 99% implied analyst upside.
IBM trades at a forward P/E of 17 with a 3% dividend yield, but Polymarket prices an 83% probability of another earnings miss on July 22.
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IBM (NYSE:IBM) currently trades at $212.67, while the average Wall Street price target sits at $273.75, leaving a gap of roughly 29% between current levels and analyst consensus.
That gap widened sharply this week. IBM runs the mainframes, hybrid cloud stack, and consulting practice most Fortune 500 companies depend on. Wall Street had treated it as a durable AI beneficiary through Red Hat and watsonx, making the past few trading sessions a shock.
Wedbush's Dan Ives maintains a $350 target that implies more than 64% upside, roughly double consensus.
IBM plunged more than 26% in one week after management preannounced Q2 results well below consensus. CEO Arvind Krishna attributed the shortfall to customers redirecting IT budgets toward AI servers and memory amid a global shortage, with additional pressure from the z17 mainframe program launch.
The reaction was severe. IBM had beaten estimates for four consecutive quarters, and trailing free cash flow for Q1 2026 had softened to $2.22 billion, down 44.15% year over year. A Wall Street Zen downgrade to sell accelerated the selling.
Software peers Salesforce and ServiceNow sold off alongside IBM on the same news, while semiconductor names rallied.
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The bull thesis treats this as an execution stumble, not structural decay. Ives views IBM as a core holding on his "IVES AI 30" list and is betting the Q2 miss is isolated rather than evidence of lost enterprise AI runway anchored by watsonx, automated AI agents, and consulting. Wedbush has chosen to freeze active adjustments and hold the $350 line until the formal Q2 call on July 22.
Fundamentals support this view. IBM Z mainframe revenue grew 51% year over year in Q1 2026, and the generative AI book of business crossed $12.5 billion inception-to-date by Q4 2025. Management reaffirmed FY2026 guidance for more than 5% constant currency revenue growth and roughly $1 billion of free cash flow improvement.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
