Barclays initiated coverage with an "overweight" rating
IBM (NYSE:IBM) is surging in premarket trading, up 10.3% at $328.47, after Barclays initiated coverage with an "overweight" rating and a $350 price target. The analyst highlighted IBM's software business, which generates nearly half of the company's revenue, as well as its entrenched customer base among large, regulated enterprises. The bullish note comes after a string of quantum-computing announcements that have already helped fuel a sharp rebound in the shares.
In fact, IBM is fresh off its largest weekly percentage gain since April 2001, adding 17.3% last week. Today's pop has IBM stock set to gap above the $320 level and challenge its late-2025 highs. Year over year, the equity is up 15.1%. The stock's 14-day relative strength index (RSI) sits at 86.8, deep in overbought territory after a sharp rally from its May lows near $212.
Over in the options pits, traders have rarely been more bullish. IBM's 10-day call/put volume ratio of 5.48 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 98% of readings from the past year, while its 50-day ratio of 3.60 sits in the 100th annual percentile. Such elevated call buying suggests expectations are already running high, which could create headwinds if the rally begins to lose momentum.
Analyst sentiment is leaning bullish as well. Of the 21 analysts in coverage, 10 carry a "strong buy" rating and two say "buy," compared to eight "holds" and one "strong sell."
Meanwhile, IBM sports a Schaeffer's Volatility Scorecard (SVS) of 88 out of 100, meaning the stock has historically exceeded options traders' volatility expectations during the past year.