Following yesterday’s record high, shares of International Business Machines Corp. (IBM) have come under pressure from short-term traders. Recently, IBM stock received a strong bullish boost after the company announced plans to invest approximately $10 billion in quantum computing technologies over the coming years.
In addition, on June 1, analysts at Barclays reiterated their Overweight rating on IBM and set a $350 price target, noting that the market still undervalues the company’s position in the enterprise artificial intelligence and infrastructure software segments.The stock also received additional support from several announcements made by IBM’s partner, Nvidia (NVDA), including the launch of a new AI chip designed for personal computers.
Overbought conditions increase the risk of a pullback
Since May 13, IBM shares have gained more than 50%, increasing the likelihood of a short-term correction. Following the latest all-time high of $327.98, the stock experienced elevated selling pressure as short- and medium-term traders locked in substantial profits.A potential pullback is also signaled by the RSI (14) indicator, which has entered overbought territory.Short-term traders should keep an eye on the nearest support levels at $298 and $296. A break below these levels could open the door for a decline toward $280.
Does the growth potential remain intact?
IBM remains one of the key beneficiaries of growing corporate demand for artificial intelligence and quantum computing solutions.On July 22, the company is scheduled to release its quarterly earnings report. Revenue is expected to increase by 12% quarter-over-quarter, reaching $17.84 billion.
If investor sentiment toward the AI sector remains positive, IBM shares could maintain their upward momentum. In that scenario, the stock may once again set a new all-time high, with a year-end price target of $400.
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