International Business Machines (IBM) Soars on New Analyst Upgrade

International Business Machines Corp. (NYSE:IBM) is one of the 10 Resilient Stocks Beating Market Slump.

International Business Machines saw its share prices climb by 5.04 percent on Tuesday to close at $264.94 apiece, after JPMorgan turned bullish for its stock, thanks to the rosy prospects for its software business.

In a market note, JPMorgan upgraded International Business Machines Corp. (NYSE:IBM) to “overweight” from neutral previously, while raising its price target by 7.8 percent to $291 from $270.

The coverage reflected its optimism for a strong demand for software services amid the accelerating adoption of artificial intelligence.

It said that software services will become central to International Business Machines Corp. (NYSE:IBM), with growth further seen in the second half of the year. It expects the segment to bring in predictable high-margin subscription revenue and better cash flow, contributing to a better financial profile than what its traditional hardware and consulting segments have to offer.

At present, software services make up 45 percent of International Business Machines Corp.’s (NYSE:IBM) revenues.

The company “has spent the better part of a decade repositioning itself from a hardware and services business into a software-led platform anchored by hybrid cloud and AI,” JPMorgan said.

“However, we believe that investing in high-growth software now will actually reduce that need later. Over time, it will shift IBM toward recurring subscription revenue, permanently improving the company’s financial health,” it said.

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