International Business Machines Corporation (IBM): A Bull Case Theory

We came across a bullish thesis on International Business Machines Corporation on Uncle Stock Notes. In this article, we will summarize the bulls’ thesis on IBM. International Business Machines Corporation's share was trading at $308.58 as of November 28th. IBM’s trailing and forward P/E were 36.78 and 25.13 respectively according to Yahoo Finance.

International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. IBM’s 2027 roadmap represents a strategic pivot from simply increasing qubit counts to focusing on computational quality and scalability, emphasizing gate depth and modularization.

The company aims to deliver the “Nighthawk” processor with 1,080 qubits capable of executing 10,000 quantum gates, a critical milestone that enables complex scientific calculations and the first steps toward quantum utility, even if full quantum advantage remains further out.

Simultaneously, the “Cockatoo” processor will demonstrate modular entanglement between two independent chips via a “Universal Adapter,” validating the feasibility of a modular quantum network that can scale beyond the physical limits of a single chip. IBM’s vision is not to replace traditional computing but to create a hybrid ecosystem where quantum and high-performance computing work together seamlessly, unlocking new scientific capabilities that conventional systems cannot efficiently simulate. Recognizing that hardware alone is insufficient, IBM is building a soft ecosystem through computation libraries and workflow accelerators, making quantum tools accessible to scientists, developers, and analysts.

This approach mirrors successful strategies in classical computing, such as Nvidia’s CUDA, ensuring a practical and user-friendly experience. Overall, IBM’s 2027 blueprint seeks to achieve two concurrent objectives: a usable quantum machine capable of addressing meaningful problems and a scalable modular framework that lays the groundwork for multi-million-qubit supercomputers beyond 2029. By aligning near-term utility with long-term scalability, IBM positions itself as a pragmatic and ambitious leader in the quantum computing landscape, providing both tangible scientific value today and a clear path toward a fully modular quantum future.

Previously we covered a bullish thesis on International Business Machines Corporation (IBM) by Magnus Ofstad in December 2024, which highlighted its shift to autonomous AI agents and growth potential of watsonx.ai. The company's stock price has appreciated approximately by 34.75% since our coverage. The thesis still stands as IBM expands AI capabilities. Uncle Stock Notes shares a similar perspective but emphasizes IBM’s 2027 quantum roadmap and modularization strategy.

International Business Machines Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held IBM at the end of the second quarter which was 57 in the previous quarter. While we acknowledge the potential of IBM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.