Wedbush analyst Dan Ives says that quantum computing is becoming a “derivative play” on the AI boom because it could help push artificial intelligence to the next level. Nevertheless, he told CNBC that the industry is still extremely early, comparing it to warm-ups before the first inning, since many quantum projects have not yet reached commercial scale. His comments came as quantum stocks rallied after reports stated that the Trump administration is awarding $2 billion in grants to nine companies. Tech giant IBM (IBM) stood out because it is expected to receive $1 billion from the U.S. Commerce Department.
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Explore IBX for 2X leverage on IBMThis makes it the biggest recipient of the quantum funding. Interestingly, Ives specifically called IBM CEO Arvind Krishna “way underappreciated by investors” and framed IBM’s transformation as a turnaround story with “massive upside.” Traders seemed to agree with that idea, as nearly 200,000 IBM options contracts changed hands, about 15 times the recent daily average, while calls outpaced puts by almost 8 to 1.
The options activity suggests that some investors see the government’s support as a possible catalyst for a longer IBM rally. In fact, one large trader spent $2.7 million buying more than 500 December 2028 call contracts with a $260 strike, which means IBM would need to climb above roughly $312 by expiration for that trade to break even. The market may also be drawing comparisons to Intel (INTC), which recovered sharply after the government took a major stake in the company.
Is IBM a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on IBM stock based on 10 Buys, seven Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average IBM price target of $281.47 per share implies 12.5% upside potential.
