Core Insights - IBM's recent earnings and guidance exceeded market expectations, but concerns regarding its software business, particularly the mixed cloud segment driven by Red Hat, have caused investor unease [1][2] - Analysts believe the stock's decline due to Red Hat's slowdown is an "instinctive panic reaction" and does not alter IBM's positive growth trajectory in the artificial intelligence market [1] Group 1: Analyst Perspectives - Stifel analyst David Grossman remains optimistic about IBM's overall performance but warns that a "software reset" may negatively impact the stock in the short term, especially after an 18% increase in stock price over the past seven weeks [1] - Wedbush highlights IBM's $9.5 billion backlog in generative AI orders, indicating significant progress in AI-related projects, maintaining an "outperform" rating with a target price of $325 [1] - Wedbush analyst Dan Ives emphasizes IBM's strong market positioning amid the demand for hybrid cloud and AI applications, suggesting that any moderate panic sell-off would be a buying opportunity [2] Group 2: Financial Guidance and Adjustments - Bank of America analyst Wamsi Mohan slightly lowered the target price for IBM from $315 to $310 but reaffirmed a "buy" rating, citing the company's transition to higher-margin software and strong free cash flow [2] - IBM has raised its revenue growth guidance for fiscal year 2025 to over 5%, with an expected increase in pre-tax profit margins by over 1% and free cash flow projected at approximately $14 billion [2] - Management acknowledged a slowdown in Red Hat's quarterly growth due to execution challenges and lower-than-expected consumer services, adjusting the fiscal year 2025 growth expectation to about 14% year-over-year [2]