IBM Stocks Edge Higher Although Truist Questions AI Payoff Timing

This article first appeared on GuruFocus.

IBM, the enterprise-technology and hybrid-cloud company (NYSE:IBM), received a Hold rating and $240 price target as Truist Securities began coverage, with shares up to $227.16 at 10:52 a.m. ET on October 9. That leaves roughly 5.7% upside to the analyst’s target. A strong bounce. A restrained endorsement.

According to Truist’s assessment, IBM has plenty working in its favor: mainframes, Red Hat, software that works across AI models and a sizable consulting business. The sticking point is timing. Customers are pouring money into computing infrastructure, but that does not automatically mean an immediate rush of orders for IBM’s data tools, orchestration software or implementation services. Building capacity and putting it to profitable use are separate spending decisions.

The valuation snapshot puts shares 6.59% below the $243.18 GF Value estimate, suggesting a modest…