IBM’s New z17 Mainframe Set to Boost Sales Cycle With AI-Powered Capabilities
IBM’s newly launched z17 AI mainframe could kick off a strong sales cycle for the tech giant, according to analysts at Bank of America (BofA). Unveiled earlier this month, the z17 is being described by IBM as the next evolution of its flagship mainframe platform, featuring built-in AI capabilities across hardware, software, and system operations.
The company announced that the z17 will be available beginning June 18. IBM also revealed plans to release its Spyre accelerator chip—which supports generative AI on the mainframe—during the fourth quarter of this year.
Also read: IBM and ESA Unveil TerraMind
Analysts Expect Prolonged Growth Cycle
In a note to clients, BofA analysts pointed out that IBM’s mainframe revenue cycles have shown steady improvement with recent iterations, noting a trend toward longer-lasting growth. The analysts said IBM’s shift to more flexible pricing models, including cloud-style and on-demand payment structures for both software and hardware, has further strengthened this momentum.
They believe the z17 will contribute at least one percentage point toward IBM’s goal of exceeding 5% annual revenue growth. The full impact of the Spyre AI processors is expected to be felt in 2026, potentially offering further upside to IBM’s earnings.
Led by analyst Wamsi Mohan, the BofA team expressed confidence in the z17’s prospects. They believe enhanced AI capabilities and renewed interest in mainframe software will result in a robust product cycle. They also maintained their “buy” rating on IBM shares, describing the stock as a defensive option amid macroeconomic uncertainty. Reliable revenue growth and a strong dividend yield were cited as key factors supporting their recommendation.
Solid Q1 Results and Steady Guidance
IBM recently reported first-quarter earnings that surpassed Wall Street expectations. Despite concerns over tariffs and government budget cuts, the company reaffirmed its full-year revenue outlook. AI remains a key driver, with IBM stating that its generative AI-related business has now exceeded $6 billion in total bookings, growing by over $1 billion in the most recent quarter alone.
However, IBM did acknowledge that 15 government contracts were canceled as part of a cost-reduction initiative by the Trump administration. This led to temporary pressure on its stock price.
Ahead, IBM forecasts second-quarter revenue of between $16.40 billion and $16.75 billion, slightly ahead of consensus. It also reaffirmed its aim to achieve a minimum of 5% revenue growth for the entire year.
