What happened

International Business Machines (IBM -1.06%) stock gained 14.1% in December, according to data from S&P Global Market Intelligence. The company's share price got a bump thanks to favorable analyst coverage, and it looks like investors are warming up to the tech giant after the completion of its infrastructure business spinoff. 

IBM Chart

IBM data by YCharts

IBM completed its spinoff off its managed infrastructure services business early in November, with Big Blue retaining a 19.9% stake in the new company, Kyndrl (KD 0.41%). The separation has made IBM more clearly focused on hybrid-cloud and artificial intelligence (AI) services, and some investors are betting that the more streamlined business will help pave the way for stronger performance in the future. 

Digital clouds raining ones and zeros.

Image source: Getty Images.

So what

Credit Suisse analyst Sami Badri published a note on IBM stock on Dec. 7, giving the company's shares an overweight rating and maintaining a one-year price target of $164.29 per share. At the time of the note's publication, this suggested upside of roughly 37%, and it looks like Badri's bullish coverage helped generate some momentum for the stock. 

Now what

IBM stock has continued to climb early in January's trading. The company's share price is up roughly 3.3% in the month so far. 

IBM Chart

IBM data by YCharts

With volatility prompting sell-offs for many growth-dependent tech stocks early this month, some money appears to be moving into IBM stock, which trades more in line with value stock territory. The company now has a market capitalization of roughly $124 billion and trades at about 13.5 times this year's expected sales. IBM also pays a dividend yielding 4.7%.  

The last decade has been challenging for IBM shareholders. While the company's pivot to cloud services and $34 billion acquisition of RedHat helped spur segment growth, big declines for its information-technology services business and softening performance for mainframe sales as more processes have moved to the cloud have weighed on the business.

Over the last decade, Big Blue only managed to post one year of annual sales growth, with even that period's increase coming in at a paltry 1%. Now that Kyndryl has been spun off into a separate entity, IBM is entering a new phase that will be largely unburdened by the declining infrastructure services business, and it looks much better positioned to deliver revenue growth. However, there are still some big challenges and risk factors on the horizon, and it remains to be seen whether management will finally deliver the long-promised turnaround.