RBC Sees AI Tailwinds Building for IBM as Enterprise Spending Stabilizes

International Business Machines Corporation (NYSE:IBM) is included among the 12 Best DOW Stocks to Buy in 2026.

On January 5, RBC Capital Markets raised the price target on International Business Machines Corporation (NYSE:IBM) to $350 from $300 and kept an Outperform rating.

The firm said that 2026 could be the year when AI tailwinds become more visible for companies that are ready for enterprise adoption. Those who are not may continue face pressure from the view that “AI is the death of software.” Enterprise spending appears to be stabilizing, with improvement showing up in select areas. GenAI is driving innovation, even as management teams stay cautious in their early 2026 guidance, the analyst noted.

International Business Machines Corporation (NYSE:IBM) is seeing solid momentum across its AI portfolio, including watsonx and Red Hat AI. The company has also partnered with Anthropic to integrate the Claude large language model into IBM’s software offerings, adding depth to its AI capabilities.

Hardware has played a role as well. IBM’s z17 mainframe platform, built with advanced AI inference features, has supported infrastructure demand. In the third quarter, that mix helped deliver 10% growth in the software business and 17% growth in the infrastructure segment.

International Business Machines Corporation (NYSE:IBM) focuses on hybrid cloud, artificial intelligence, and consulting services, serving enterprises around the world.

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.