What happened

Shares of technology giant International Business Machines (IBM -0.89%) -- you know it better as IBM -- are up 3.7% as of 3:33 p.m. ET Monday, following through on Friday's strong rally effort. The gain is largely being driven by the company's role in a new semiconductor production pact forged late last week between Canada's Prime Minister Justin Trudeau and United States President Joe Biden.

So what

It's not exactly news that U.S. tech companies are looking for ways to manufacture more of their computer chips domestically, aiming to avoid future supply chain disruptions like the ones spurred by the COVID-19 pandemic. However, it was a narrative that seemingly didn't heavily involve legacy technology outfit IBM.

Now it does. As part of the new Canadian/U.S. semiconductor industry production agreement, the announcement posted Friday at Whitehouse.gov explains, "Both countries will advance a cross-border packaging corridor, beginning with Canada and IBM providing a significant investment to develop new and expanded packaging and testing capabilities at its Bromont [Quebec] facility."

Neither the White House nor the company has offered any additional details, like how much IBM will be investing or what sort of fiscal benefit it expects to derive from the deal. It may not even fully know itself. The agreement does inject IBM into a domestic tech-production shift it had largely been left out of, though, inspiring investors that believe the deal will bear some sort of fruit in the future.

Now what

In and of itself, the establishment of a semiconductor production corridor isn't enough of a reason to step into IBM if you weren't interested already. Details regarding the matter are still scant, including its time frame and long-term potential. Thus far, it's just words.

The fact that IBM shares were so easily prodded higher by superficial news, however, arguably points to potential that isn't fully priced into the stock's present value.

With or without the new chip production pact, IBM is a company that's spent the last several years quietly reinventing itself into something more relevant than it had been; it's a particularly important presence within the hybrid cloud computing landscape now that Red Hat is part of its family. The promise of any additional business stemming from the aforementioned agreement simply bolsters the already-bullish case for owning the stock.

Just be aware that its shares have been erratic for some time now, as the market struggles to figure out what the company has become now that it's moved past its legacy businesses like mainframes and PCs.