RBC Calls International Business Machines Corporation (IBM) a Defensive AI Play as Red Hat Headwinds Ease

Core Viewpoint - IBM is positioned as a strong player in the AI sector, with RBC Capital maintaining an Outperform rating and a price target of $350.00 ahead of its earnings report [1][3]. Group 1: Earnings Expectations - RBC anticipates solid results from IBM, expecting an increase in overall revenue and free cash flow [2]. - Investors are particularly focused on whether IBM can sustain its recent momentum as earnings are reported [2]. - The software revenue subcomponents will be closely monitored, with Red Hat facing pressure but expected to recover and contribute to growth by fiscal 2026 [2]. Group 2: Investment Perspective - RBC views IBM as a defensive AI investment, highlighting its exposure to hybrid cloud, AI, and long-term opportunities in quantum computing [3]. - The firm continues to favor IBM as a defensive play in the AI market, maintaining its Outperform rating and price target [3].