Optimistic about quantum computing and AI business prospects, Susquehanna gave IBM (IBM.US) an “holding” rating for the first time

The Zhitong Finance App learned that the investment bank SusqueHanna covered IBM (IBM.US) for the first time, gave it a “holding” rating, and set a target price of $303. The agency believes that IBM still has potential for growth in quantum computing, the Watsonx artificial intelligence platform, and software business, but the consulting business faces challenges brought about by the wave of automation and oversupply in the industry.

Susquehanna analyst James Friedman said in a report released on Friday that IBM's quantum computing business has large long-term value, and its valuation is equivalent to about $65 per share. At the same time, the cumulative order volume of Watsonx AI has exceeded US$12.5 billion, and the software business is expected to maintain double-digit growth, while the next-generation z17 mainframe (mainframe) product cycle is expected to continue to drive performance growth.

However, the agency is cautious about the prospects of IBM's consulting business. Friedman pointed out that with the rapid spread of automation technology and the increase in industry supply, the consulting business may face greater competitive pressure in the future. Furthermore, IBM's stock price increased by a cumulative total of about 25% in the second quarter of 2026. It is now close to an all-time high. The valuation premium is about 9 times the historical average, and the valuation premium compared to the S&P 500 index has also reached about 3 times.

Despite this, Susquehanna is optimistic about IBM's competitive advantage in quantum computing. Friedman said that IBM has always been a leading company in the field of quantum computing and continues to achieve established technical goals ahead of schedule. Although the quantum computing market is still in its early stages of development, and there is great uncertainty about the future, considering its huge potential market size, IBM is expected to occupy a high market share.

The agency also believes that IBM's strategy to build a world-leading “hybrid cloud+artificial intelligence” platform distinguishes it from hyperscale cloud service providers such as Amazon Cloud Services, Google Cloud, and Microsoft Azure.

Friedman said that IBM is not trying to build another public cloud service provider, but is positioning it as a governance and orchestration platform for enterprises to deploy AI applications and manage workloads in hybrid and multi-cloud environments. This positioning has strong competitive barriers in industries with high regulatory requirements and high profit margins, such as finance and healthcare, and is expected to be an important support for IBM's continued growth in the future.