IBM jumps 30% after Barclays labels its software as the solution to the SaaSpocalypse.

      IBM's stock rose by 10% after Barclays began coverage with an overweight rating and a $350 target price, suggesting that IBM’s infrastructure software is the "strong segment" of enterprise software that is likely to remain unaffected by AI disruption. This increase builds on a 30% rally in May, fueled by a $10 billion commitment to quantum computing and funding from the Trump administration.

      On Monday, IBM's stock jumped 10% following Barclays' market coverage, which included an overweight rating and a target price of $350, about 11% higher than the opening price. This rise continues a trend that has seen IBM’s stock climb almost 30% in May, marking its best monthly performance in nearly 24 years. Year to date, the stock is up 10%, recovering losses from earlier sell-offs in the software sector.

      Barclays’ optimistic outlook centers not solely on quantum computing, despite its significance. The main argument focuses on IBM’s infrastructure software portfolio, which caters to large, heavily regulated enterprises and accounts for most of the company’s profits. In a sector where AI technology threatens many horizontal SaaS companies, Barclays posits that IBM’s deeply integrated infrastructure tools are the least likely to be disrupted.

      The software perspective is crucial. “Despite the current negative perception of software among investors, IBM is providing infrastructure software (the advantageous part) to large, often heavily regulated clients, which fosters a robust setup that is unlikely to face negative repercussions from AI,” the analysts noted. They predict moderate organic revenue growth and continued expansion of margins, labeling IBM as “a stable earnings compounder with a Quantum option.”

      This distinction is important. The recent market downturn hurt software stocks indiscriminately, but those most at risk are the providers of horizontal tools, such as project management software, CRM systems, and form builders, which AI could potentially replicate. In contrast, IBM’s software business—encompassing middleware, database management, and enterprise integration platforms—operates at an infrastructure level with high switching costs and compliance requirements that act as barriers to exit.

      In their most optimistic scenario, Barclays set a price target of $449, indicating a 51% potential increase from the last closing price.

      Barclays framed IBM’s endeavors in quantum computing as additional potential rather than the central investment rationale. “Quantum computing may represent the next significant computational paradigm, following eras dominated by CPUs and GPUs,” the analysts wrote, likening IBM’s position in quantum to Nvidia’s leadership in GPUs. Last week's highly oversubscribed IPO of Quantinuum illustrated strong investor interest in quantum technology.

      IBM has pledged $10 billion for quantum computing over the coming five years, as disclosed in a recent regulatory filing. A central component is Anderon, a standalone quantum chip manufacturing facility located in Albany, New York, created with a $1 billion contribution from the US Department of Commerce under the CHIPS Act, matched by $1 billion from IBM. Anderon is set to be the first purpose-built 300-millimeter quantum wafer fabrication facility in the US.

      The US Commerce Department's $2 billion quantum investment, allocated among nine companies and announced on May 21, represents the largest single quantum R&D commitment in US history, with IBM receiving the largest portion. Other smaller companies like D-Wave Quantum and Rigetti Computing, along with their European counterparts, are pursuing distinct quantum architectures with their own government support.

      A notable aspect of the rally is a resurfaced video of President Trump from a December 2025 business roundtable at the White House, which has been shared widely on social media platforms like X and Reddit. In the video, Trump praised IBM CEO Arvind Krishna as “a legend,” noting, “He’s taken the stock from a rather low price to a very nice price. I won’t say high because I’m sure you’re going to say it’s going to go up a lot more, right?”

      Social media has portrayed this clip as an endorsement of IBM stock by Trump. Ethics filings indicate that Trump’s personal investment account has acquired IBM shares in recent months. The combination of a presidential mention, visible government backing through the quantum funding initiative, and Barclays’ recent analysis has created a momentum loop attracting both institutional and retail investors.

      Overall, the recent performance of IBM’s stock aligns with a larger trend of legacy technology companies regaining relevance in the age of AI. Dell’s stock increased by 32% last week due to demand for AI servers. Cisco, once viewed as a cautionary tale from the dot-com era, has seen gains driven by the demand for enterprise networking related to AI infrastructure. IBM’s narrative intertwines two elements: a software business resilient to AI disruptions and a quantum computing endeavor that could yield transformative results if the technology develops as anticipated.

      The question of whether the quantum prospect alone justifies the current valuation remains open to debate. IBM’s quantum initiative is substantial and well-funded, but commercial quantum computing is still years away from producing significant revenue. Barclays emphasizes that the