Analysts predict IBM’s $34 billion acquisition of Red Hat could be ‘game changing,’ but there are still plenty of reasons to be skeptical

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IBM announced Sunday it plans to acquire Red Hat, a major distributor of open-source software, at more than a 60 percent premium. The $34 billion price tag and timing of the deal raised some eyebrows.

IBM has seen several years of near-consistent declines in revenue. And it trails heavyweights such as Amazon, Microsoft and Google for a small share of the cloud market.

Wall Street is largely optimistic on the deal, if slightly surprised. The consensus is IBM needed to take some sort of action to boost performance in a key business segment. But there’s still the question of short-term earnings and a possible bidding war. IBM isn’t expecting positive earnings impact from the tie-up for at least two years, should the deal go through.

Here’s what top Wall Street analysts are saying about the deal:

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