On February 5, 2025, Goldman Sachs maintained its "Buy" rating for IBM (NYSE:IBM), with the stock trading at around $263.45. IBM, a major player in the Technology, Media, and Telecom (TMT) sector, is known for its software and hardware solutions. Despite a slight decrease of 0.38% in its stock price, Goldman Sachs believes IBM's potential is underappreciated.
Goldman Sachs analyst James Schneider remains optimistic about IBM, especially after the company's Investor Day on February 4. He has set a price target of $275, indicating confidence in IBM's growth prospects. Schneider highlights IBM's strategy to achieve over 5% total revenue growth from 2025 to 2027, including mergers and acquisitions, which could drive the stock higher.
IBM's focus on software revenue growth is a key factor in Schneider's positive outlook. The company aims for a 10% growth rate, surpassing previous expectations. Red Hat, a subsidiary of IBM, is experiencing mid-teens growth, contributing to the overall software segment's success. This growth is driven by increasing demand for technologies like containerization, OpenShift, and Ansible.
IBM's financial metrics further support its potential. The company has a market capitalization of approximately $243.6 billion, reflecting its significant presence in the industry. With a trading volume of 4,083,716 shares, investor interest remains strong. IBM's stock has seen a high of $265.72 today, marking its highest price over the past year, while the lowest price in the past year was $162.62.
Goldman Sachs' decision to maintain a "Buy" rating suggests confidence in IBM's long-term value, particularly for investors seeking growth in the TMT sector. The company's strategy to sustain accelerated software revenue growth and improve margins aligns with Schneider's positive assessment, indicating potential upside for IBM's stock.
