TECH - Why Goldman Sachs Is Bullish On IBM | Benzinga
International Business Machines Corp (NYSE:IBM) shares are trading higher after Goldman Sachs analyst James Schneider initiated coverage with a Buy rating and announced a price target of $200.
The analyst noted the industry is amid a cyclical correction driven by IT spending constraints, a near-term shift in spending priorities toward AI-focused CapEx, and away from Software and Services.
At the same time, Schneider noted investors are grappling with the secular question of whether Generative AI represents a significant threat to the IT Services sector.
Generative AI will likely be a net benefit for the sector, but it may take some time to realize these benefits because of the technical debt corporations must overcome before realizing the benefits of AI, the analyst said.
The market is conflating these cyclical and secular risks, which presents a significant opportunity in select names at this point in the cycle.
Schneider is most bullish on names that he noted are positioned to be ...