IBM shares tumble 8% after record rally, set to snap five-day winning streak

Shares of IBM dropped 8% in Wednesday's trade, falling to $302, as investors appeared to book profits following a sustained rally that had pushed the stock to multiple record highs. The stock had closed the previous session with a 3% gain and touched a fresh all-time high of $332 during intraday trade.

The rally had also marked the stock’s fifth straight day of gains, during which it surged a cumulative 31%. The sharp acceleration in the share price came after the company announced plans to invest more than $10 billion over the next five years in quantum computing.

The investment will span research and development, capital expenditure, manufacturing scale-up, ecosystem partnerships, and mergers and acquisitions. IBM said these initiatives are aimed at accelerating its quantum roadmap beyond delivering the world’s first large-scale, fault-tolerant quantum computer, while also strengthening US leadership in quantum technology.

The announcement came a week after IBM, and the US Department of Commerce signed a letter of intent to build a dedicated quantum chip factory — called Anderon — in the United States.

The company said the investment reinforces its mission to bring practical quantum computing to the world. IBM added that it expects partners using its quantum computers to demonstrate “quantum advantage” as early as 2026.

IBM also reiterated that it has a clear roadmap to deliver IBM Quantum Starling in 2029, the world’s first large-scale, fault-tolerant quantum computer, which is expected to execute 20,000 times more operations than today’s existing systems.

The company currently operates the world’s largest fleet of quantum computers. IBM said it has deployed more than 90 quantum systems globally through cloud-based and dedicated on-site deployments, giving it a larger installed base than the rest of the industry combined.

Quantum computing has increasingly become a global technology race. France recently announced a $1.7 billion investment plan for quantum and semiconductor development, while countries including Germany, China, the UK, and Canada are also ramping up investments in the sector.

Consulting firm McKinsey estimates that quantum computing could generate up to $2.7 trillion in economic value by 2035. In the US, rivals such as Google and Microsoft are also aggressively pursuing breakthroughs in the field.

Shares maintain a steady winning run

IBM shares have maintained a steady upward trend since May 2023. Although the stock witnessed intermittent volatility along the way, it consistently regained momentum and recovered from corrections to move higher.

During this period, the stock has climbed from $128.59 to the latest close of $329, translating into a massive gain of 156%. On a broader basis, the stock has delivered positive returns in each of the last five years, while in the current year so far, it has gained modestly by 3%.

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