IBM to invest $20 billion in the Hudson Valley over 10 years

Tech giant IBM (NYSE: IBM) is set to invest $20 billion in the Hudson Valley region in the next decade. This plan by the technology firm gained widespread support in the US government, as President Biden plans to trumpet the investment plans in developing and manufacturing semiconductors, AI, and quantum computing.  

IBM further claimed that Poughkeepsie would become their mainframe for quantum computing development without further breaking down the $20 billion plan. The company also recognized the support from the government as a positive factor. 

“IBM is deeply honored to host President Biden at our Poughkeepsie site today, and we look forward to highlighting our commitments to the innovations that advance America’s economy. As we tackle large-scale technological challenges in climate, energy, transportation, and more, we must continue to invest in innovation and discovery – because advanced technologies are key to solving these problems and driving economic prosperity, including better jobs, for millions of Americans.” 

At the time of writing, shares of IBM in premarket trading are mainly flat to slightly down, despite the fresh announcement of the $20 billion plan. 

IBM chart and analysis 

Notably, IBM is one of the better-performing IT services stocks; it outperforms 74% of 155 stocks in the industry. Over the past month, IBM traded in a wide range from $118.61 to $130.99, staying slightly above the 20-day moving average. 

Technical analysis indicates a support zone from $121.35 to $122.77 and a resistance zone from $126.62 to $129.34. 

TipRanks analysts rate the stock a ‘moderate buy,’ with the average price in the next 12 months reaching $145.25, 15.52% higher than the current trading price of $125.74. In particular, out of 10 Wall Street analysts, five have a ‘buy’ rating, four have a ‘hold’ rating, and one has a ‘sell’ rating.

Note redemption

Toward the end of September, IBM released its 8-K form, which stated that the company is set to redeem $900 million of 2.875% Notes due 2022. This indicates that the tech giant is in solid financial condition and able to pay off the certificate of deposit or bond on or before its maturity date.

While IBM is down 7.57% year-to-date (YTD), the catalysts of bond repayment and huge investments over the next decade, supported by the US government, could provide the next leg-up for the shares. 

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