Shares jumped as Barclays doubled down on IBM with a fresh bullish call spotlighting quantum computing upside, sending the stock up 5.7% in pre-market to $278.00 and extending a rally that has seen shares climb roughly 11.6% in just over a week. The move raises a sharp question: is Wall Street pricing in a quantum future that remains years from generating meaningful revenue? IBM's $10 Billion Quantum Gamble Lifts Shares Off a Steep Slide — but Is the Bounce Built on Hype or Hardware
Shares shifted sharply higher Thursday as IBM climbed 5.7% in pre-market to $278.00, bouncing off a punishing three-week slide that dragged the stock from a record $332.46 on June 2 down to roughly $249 by June 22. The catalyst: a renewed wave of buying tied to Barclays' bullish coverage, which set a $350 base-case price target and a quantum-fueled bull case of $449. For shareholders, the question is whether IBM's quantum ambitions can underwrite that kind of premium — or whether Wall Street is simply recycling the same headlines.
• Barclays' Real Bet Is on Software, Not Quantum Hype. Barclays said nearly half of IBM's revenue and most of its profit come from software, a mix expected to grow further as software outpaces other segments.
The $350 target rests on IBM's steady software business, not on quantum computing — Barclays expects the stock to reach that level even if the quantum bet never pays off. Quantum only drives the more optimistic case of $449. That distinction matters: investors buying today at $278 are mostly paying for an existing business, with quantum as a free lottery ticket.
• A $10 Billion Commitment With Only $1 Billion in Lifetime Quantum Revenue. IBM pledged $10 billion over five years toward quantum, racing to deliver the first large-scale, fault-tolerant quantum computer by 2029. Yet from Q1 2017 through Q4 2024, IBM's cumulative quantum signings averaged just ~$31.3 million per quarter.
McKinsey projects the overall quantum market could reach $97 billion by 2035 , but IBM must spend heavily for years before that materializes.
• Government Money Adds a Real Floor. The U.S. Department of Commerce allocated $1 billion to IBM under the CHIPS Act for quantum development, and IBM committed an additional $1 billion into a quantum fabrication facility.
Separately, Commerce earmarked $2 billion across nine domestic quantum companies. Federal backing reduces IBM's downside risk but doesn't guarantee commercial success.
• The Stock's Violent Swings Show How Fragile Sentiment Remains. IBM hit an all-time high of $332.46 on June 2, then cratered to roughly $249 by June 22 — an $83 drop with no earnings miss or CEO scandal, just compounding pressures. Today's bounce reclaims barely a third of that loss. Barclays expects mid-single-digit organic revenue growth alongside continued margin expansion , a profile that rewards patience, not momentum trading.