https://www.barrons.com/articles/ibm-stock-quantum-computing-1384b7c4
By: Mackenzie Tatananni | Updated Aug 31, 2026, 11:11 am EDT / Original Aug 31, 2026, 10:39 am EDT
In their latest research note, Susquehanna analysts raised a question most tech investors probably have considered at least once: “When do investors need to own IBM for quantum?”
The line of questioning makes sense, considering IBM’s quantum division has drummed up plenty of attention in recent months—a bright spot at a time when the stock is under pressure.
Second-quarter earnings were the latest reminder of IBM’s sluggish organic growth, compounded by new threats including customers reallocating their budgets to artificial-intelligence hardware.
Shares have slumped 19% since July 14, anchored by a record plunge the same day IBM pre-announced earnings. In contrast, the S&P 500 has gained 2.1% over the same period.
As other business lines face headwinds, IBM’s quantum division has been a shining star in its portfolio. Susquehanna analyst James Friedman ticked off a number of recent developments including IBM’s acquisition of HRL Laboratories to bolster its hardware capabilities and a partnership with the Commerce Department to build Anderon, a standalone quantum chip foundry to serve IBM itself as well as industry players.
Still, it may seem difficult to consider quantum a cornerstone of IBM’s business. Although Big Blue has researched the technology since before the turn of the 21st century—and contributed to major scientific breakthroughs along the way—the effort generates paltry revenue. Researchers are banking on big technological advances before the end of the decade to usher in broader commercialization.
Friedman is tempering his expectations. “With a number of upcoming quantum catalysts on the horizon, each deliverable keeps accelerating,” he wrote Monday. “At the same time, there is a lot more to getting IBM’s fundamentals right as the other segments transform.”
The analyst flagged a renewed focus on software within the consulting arm, marked by a new leadership appointment, and limited growth in IBM’s Red Hat software business due to passing server supply constraints. There is also the “math of the mainframe cycle” to consider: Revenue was delayed rather than lost, with 40% of the deals that slipped in the second quarter closing early in the following period.
While Friedman remains Neutral-rated on IBM shares, he raised his price target to $235 from $225. The revision reflects upcoming catalysts expected to generate buzz around the technology, particularly the annual Quantum World Congress meeting in late September.