IBM shares surged in premarket trading on Friday, extending gains after the company unveiled a massive $10 billion quantum-computing investment plan and a $5 billion cybersecurity initiative with Red Hat. The stock was last indicated at $264.22, up $9.02, or about 3.5%, from its previous close, ahead of the main U.S. trading session.
The news comes as IBM provides investors with a clearer, costed roadmap for its quantum ambitions. The company announced plans to invest over $10 billion over five years to build a large-scale, fault-tolerant quantum computer by 2029. This system is designed to maintain reliable calculations even when quantum bits encounter errors, addressing a key challenge in the field.
IBM said the funds will be allocated to research, equipment, facilities, manufacturing scale-up, partnerships, and acquisitions. The company has already deployed more than 90 quantum systems and has over 325 companies, universities, startups, and government agencies using its systems for work in chemistry, biology, and materials science.
On the same day, IBM and Red Hat announced Project Lightwell, a $5 billion effort to secure open-source software. This initiative will leverage new AI tools and more than 20,000 engineers, with early adopters including major financial institutions such as Bank of America, Citi, Goldman Sachs, JPMorganChase, Mastercard, Morgan Stanley, Visa, and Wells Fargo.
IBM CEO Arvind Krishna emphasized that open source is 'the backbone of today's digital economy' and that the market is at an 'inflection point' in how it is built and secured. Rob Thomas, IBM's senior vice president of software, told Reuters that the service will launch 'as a commercial offering in the next 30 days,' providing customers with a 'stamp of approval' for production use.
The U.S. government is also involved. IBM and the Commerce Department last week announced a letter of intent for Anderon, a new IBM company intended to become America's first pure-play quantum foundry. The department's proposed $1 billion CHIPS award would be matched by $1 billion in cash from IBM, along with intellectual property, assets, and staff.
This places IBM in a crowded but increasingly funded race. Smaller quantum names like Rigetti Computing and D-Wave Quantum also traded higher before the open on Friday, while Alphabet's Google remains a prominent big-tech rival in the field.
Wedbush analyst Dan Ives, quoted by Investor's Business Daily, framed IBM's move as a way to 'future-proof' the business as quantum and AI security risks attract more funding and government attention.
U.S. stock-index futures were steady on Friday after a record-setting session, with investors monitoring Middle East headlines, inflation data, and another AI-linked surge in Dell shares. However, risks remain. Quantum computers still face high error rates, and Alphabet CEO Sundar Pichai said last year that 'practically useful' quantum systems could still be five to 10 years away. If IBM's 2029 target slips or customers stay in pilot projects, the new spending could become a drag rather than a catalyst.
For now, the market is treating the announcements as more than lab news. The next test is whether IBM can hold the premarket gain after the open and, over the next few quarters, show that quantum and security commitments can translate into revenue, not just headlines.
