IBM shares jumped nearly 13% on Friday, June 1, closing near $298, and pushed above $300 on Monday. The rally came after Barclays analyst Raimo Lenschow kicked off coverage with an Overweight rating and a $350 price target, citing sticky software revenue from large regulated customers. Wedbush had already reiterated a Buy rating with a $320 target on May 29. A recycled December 2025 video of President Trump praising IBM resurfaced over the weekend but was not the primary driver, according to market participants.
Barclays' $350 Target
Lenschow's initiation provided a clear catalyst. He highlighted IBM’s software business, particularly the recurring revenue from clients in regulated industries, as a key reason for the bullish call. Wedbush’s existing Buy rating reinforced the sentiment. Yet the move wasn't just about analyst upgrades. Trading volume climbed steadily since mid-May, hitting 28.48 million shares on Friday — well above average.
Bearish Divergence Beneath the Rally
Technical readings tell a more complicated story. The Chaikin Money Flow (CMF) indicator shows a bearish divergence: the stock price is rising, but CMF has been making lower peaks below a falling trendline. It currently sits near 0.15, and would need to clear 0.25 to signal genuine institutional buying conviction. At the same time, the put-call ratio collapsed — the volume ratio dropped from 0.60 on May 20 to 0.23. Open interest eased from 0.84 to 0.66. Those numbers point to a short squeeze, not fresh bullish accumulation. The rally appears driven more by shorts covering than new buyers piling in.
Debt and Red Hat Slowdown
Fundamental cautions remain. IBM carries about $66 billion in debt. The company reported decelerating growth at Red Hat, its flagship cloud unit. Despite a 28% monthly surge, the stock is flat for the year. Friday’s rally essentially retraced a decline from a January swing high of $319 to a May 13 low of $212. That means the stock has recovered ground, but hasn't broken new territory.
Next Test at $319 Resistance
The immediate test is the $319 level. That price rejected IBM twice — on November 12 and January 29. If the stock can't clear that barrier, it's likely to look for support first at $278, then $266 and $253. With short-squeeze momentum fading and fundamentals under pressure, the rally's durability is far from certain. Investors will be watching whether volume and the put-call ratio shift back toward bullish conviction, or whether IBM settles back into its year-long range.
