International Business Machines (IBM) shares are in focus on Wednesday morning after the legacy technology company also known as the “Big Blue” announced an artificial intelligence (AI) partnership with Anthropic.
The collaboration aims at integrating the Claude family of large language models (LLMs) into IBM’s comprehensive software portfolio, marking a significant expansion of its AI capabilities.
IBM stock has been in a sharp uptrend over the past two months and is currently up some 25% versus its August low.
The Anthropic deal builds upon IBM’s existing AI ecosystem, which includes previous successful collaborations with other technology leaders.
Investors hailed the announcement on Oct. 7 since it demonstrates the company’s commitment to maintaining a diverse and robust artificial intelligence portfolio.
The strategic move is broadly expected to enhance IBM’s competitive position against major cloud providers, particularly in the rapidly growing enterprise AI market where security and compliance are paramount concerns.
In short, the agreement positions the tech giant to capitalize on accelerating enterprise adoption of AI technologies, potentially driving growth in its cloud services revenue and pushing IBM stock price higher over time.
Barchart’s options data paints a cautiously optimistic picture for IBM stock, with implied volatility suggesting a 6.67% expected move through Oct. 24.
That translates to a near-term trading range of $271.43 and $310.23. Notably, the upper bound sits closer to IBM’s recent highs, hinting at bullish sentiment.
Longer-term contracts expiring Jan. 16 widen the range considerably – from $258.23 on the downside to $323.43 on the upside – underscoring the potential for breakout momentum.
With IBM doubling down on artificial intelligence initiatives, including enterprise AI integration and hybrid cloud enhancements, the upside scenario appears more plausible.
Investors may be pricing in strategic tailwinds that favor continued strength in IBM shares.
Wall Street firms also currently forecast continued upside in IBM stock moving forward.