IBM (NYSE:IBM) shares are trading higher on Tuesday as the company is expanding its AI capabilities through a $240 million multi-year agreement with Together AI.

The companies aim to deploy a large cluster of NVIDIA HGX B300 systems on IBM Cloud, with availability expected in the first quarter of 2027.

• IBM stock is showing upward movement. What’s pushing IBM stock higher?

IBM and Together AI Partner To Scale AI Inference

This collaboration aids in enhancing AI workloads for enterprises, positioning IBM to better serve its clients during a mixed market backdrop.

The partnership aims to create the first large-scale inference cluster on IBM Cloud, designed to facilitate fast and efficient production for AI applications.

Together AI will use the infrastructure for open-source AI model inference. The deployment will be the first dedicated large-scale inference cluster on IBM Cloud using HGX B300 systems and NVIDIA Spectrum-X Ethernet networking, designed to significantly boost AI processing capacity.

IBM Technical Outlook: Key Levels and Momentum

Currently, IBM is trading at $239.38, which is about 7.4% above its 20-day simple moving average (SMA) of $222.62. However, the stock is approximately 7.1% below its 50-day SMA of $257.31, indicating a bearish trend as the 20-day SMA is below the 50-day SMA, a sign of potential weakness.

The Relative Strength Index (RSI) is at 49.90, suggesting a neutral momentum state, indicating that the stock is neither overbought nor oversold. This positioning allows for potential movement in either direction, depending on market sentiment and upcoming catalysts.

  • Key Resistance: $258.50 — Nearby level where rebounds can stall.
  • Key Support: $199.00 — Level where buyers previously stepped in.

Technology Sector Performance and IBM Relative Strength

The Technology sector is currently ranked eight out of 11 sectors, reflecting a mid-tier performance with a decline of 0.19%. Over the past 30 days, the sector has gained 2.58%, but it has seen a more modest increase of 5.15% over the last 90 days.

While IBM is outperforming its sector today by about 1.49 percentage points, the overall trend suggests the sector is facing headwinds. This context is important for traders as it highlights the stock’s relative strength against a backdrop of broader sector weakness.

IBM Earnings Preview and Analyst Price Targets

IBM is slated to provide its next financial update on Oct. 21(estimated).

  • EPS Estimate: $2.89 (Up from $2.65)
  • Revenue Estimate: $16.85 billion (Up from $16.33 billion)
  • Valuation: P/E of 21.0x (Indicates fair valuation)

Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price forecast of $256.12. Recent analyst moves include:

  • Citigroup: Buy (Lowers target to $245 on July 24)
  • Susquehanna: Neutral (Lowers target to $225 on July 24)
  • Morgan Stanley: Equal-Weight (Lowers target to $190 on July 23)

How IBM Ranks On Value, Growth, Quality and Momentum

Below is the Benzinga Edge scorecard for IBM, highlighting its strengths and weaknesses compared to the broader market: – Value: 27.78 — Stock is trading at a steep premium relative to peers.

– Growth: 40.42 — Indicates moderate growth potential.

– Quality: 80.22 — Reflects a strong balance sheet and operational efficiency.

– Momentum: 18.95 — Stock is underperforming the broader market.

The Verdict: IBM’s Benzinga Edge signal reveals a mixed profile, with strong quality metrics but weak momentum. This suggests a focus on stability and potential for growth, albeit with challenges in market performance.

Top ETFs Holding IBM Stock

  • First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV): 8.84% Weight
  • First Trust Cloud Computing ETF (NASDAQ:SKYY): 3.85% Weight
  • FT Vest Technology Dividend Target Income ETF (NASDAQ:TDVI): 6.60% Weight

Significance: Because IBM carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.

IBM Stock Rises As Investors React To AI Deal

IBM shares were up 2.27% at $238.58 at the time of publication on Tuesday, according to Benzinga Pro data.

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