Many investors forgot all about International Business Machines Corp. (NYSE: IBM). While the world passed it by and moved toward the Artificial Intelligence race, IBM had Watson long before A.I. was on the tip of everyone’s tongue. With IBM up 23% year-to-date, it is the feature of 7 less-discussed A.I. winners in a BofA Securities report.
BofA reiterated its Buy rating on IBM and raised its price objective to $290 from $270 in the call. That’s still close to 10% additional upside to BofA’s target when you add in its 2.5% dividend yield. IBM shares are currently hovering at the $271 level, and that is a full $15 higher than the consensus analyst price target shown by FinViz.
Before falling in love with any AI and supply-chain diversification players, Oggonomics would remind its readers that no single analyst report should ever be the sole basis to buy any stock. Analysts can get their thesis wrong just like the rest of us, and company or macro fundamentals can change in the blink of an eye.
According to BofA’s Wamsi Mohan, three key themes from the BofA 2025 Global Technology Conference are AI demand, storage and data locality. The report said:
AI is reshaping infrastructure demand and our companies across the board noted they are beginning to see customers align capex with real AI use-cases (although still very early innings), marking an inflection point from the experimental AI phase to deployment. AI monetization through full-stack solutions are key strategies our companies are employing to capitalize on the demand for AI without compromising margins (except in servers where margin rates are low, but margin dollar opportunity remains significant). Storage & data locality are becoming strategic again as long-context models and multimodal inferencing require tight integration of compute & high-speed storage.
The theme for IBM is that AI is now one year older and one year better and AI monetization is the key strategy priority driving infrastructure growth at IBM. BofA points out that IBM is focused on providing Generative AI and its launch of the new z17 mainframe is at the beginning of a new cycle. One key issue helping out is that mainframe customer capabilities are growing without sacrificing the secure infrastructure needed for their data.
Mohan also continues to see IBM as a defensive investment with improving revenue growth, which should drive
higher cash flow that could be re-invested for more mergers and acquisitions.
Tariffs are still said to represent a meaningful overhang for the IT Hardware supply chain. BofA noted that companies are showing varying degrees of preparedness. Tariff mitigation & supply chain agility were key themes — with supply chain diversity as a key driver in mitigating the tariff headwinds and will separate beneficiaries over others.
IBM was the focus of the Global Technology Conference when you read through the report, but BofA highlighted other stocks as the beneficiaries with higher price targets even if some are not Buy-rated:
- Arrow Electronics Inc. (NYSE: ARW) is actually rated Underperform but still saw its price objective raised to $110 from $105, versus a present price of $121.93.
- Concentrix Corp. (NASDAQ: CNXC) saw its target raised to $65 from $59 versus a present price of $56.61.
- Flex Ltd. (NASDAQ: FLEX) saw its price objective raised to $50 from $48 versus a present price of $43.07.
- Seagate Technology, PLC. (NASDAQ: STX) saw its price objective raised to $145 from $135 versus a present price of $126.97.
- Sanmina, Inc. (NASDAQ: SANM) is rated as Neutral but saw its price objective raised to $100 from $95, versus a present price of $87.16.
Western Digital Corporation (NASDAQ: WDC) saw its price objective raised to $71 from $62 (versus a present price of $55.45) as the company is selling SanDisk shares that have not yet been sold to lower its debt leverage ratios, help to fund a $2 billion buyback and to pay a dividend.
PLEASE NOTE: All analyst ratings and price targets mentioned above were issued by BofA Securities in this summary. Their ratings and targets may differ greatly from other firms on Wall Street. Oggonomics does not issue any formal ratings and does not maintain any price targets of its own on these stocks. Also please remember that no analyst report, even those with very strong conviction, ever comes with any guarantees of profits and they never contain money-back guarantees in case you lose money.
