International Business Machines (1IBM) AI Stock Analysis

International Business Machines

(Milan:1IBM)

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Positive Factors

Recurring software growthStrong software growth and expanding annual recurring revenue provide a durable, contract-based foundation for IBM’s earnings. The mix of net new business, subscriptions, and support can improve revenue visibility while funding continued investment in hybrid cloud and AI capabilities.

Negative Factors

High leverageIBM’s sizable debt load reduces financial flexibility even though leverage has improved from earlier levels. Interest obligations and refinancing needs can absorb cash that might otherwise support investment or shareholder returns, while a growth slowdown would make balance-sheet repair more difficult.

International Business Machines (1IBM) vs. iShares MSCI Italy ETF (EWI)

Market Cap: EUR 243.66B
Dividend Yield: 2.55%
Average Volume (3M): 838
Price to Earnings (P/E): 21.7
Beta (1Y): 0.27
Revenue Growth: 1.55%
EPS Growth: 32.84%
Country: Italy
Employees: 264,300
Sector: Technology
Sector Strength: 61
Industry: Information Technology Services

International Business Machines Business Overview & Revenue Model

Company Description

International Business Machines Corporation (IBM) delivers comprehensive technology solutions and services across the globe. The company's operations are structured into four primary segments: Software, Consulting, Infrastructure, and Financing. The...

International Business Machines Earnings Call Summary

Earnings Call Date:Oct 20, 2026(Q3-2026)|% Change Since:5.52%|Next Earnings Date:Jan 26, 2027

Earnings Call SentimentPositive

The call was strongly positive. IBM reported accelerated revenue growth, broad-based software and infrastructure momentum, improved margins, record first-nine-month free cash flow margin, strong IBM Z and AI-related demand, and a higher free cash flow outlook. The main challenges were modest consulting growth, a consulting margin decline, higher CapEx, cash taxes and interest expense, expected moderation in transaction processing, and the operational complexity of scaling enterprise AI.

Positive Updates

Accelerated Third-Quarter Revenue Growth

Third-quarter revenue growth accelerated to 6%, above the base case laid out in July, with growth across the segments led by software at 9%, infrastructure at 5%, and modest improvement in consulting.

Negative Updates

Consulting Growth Remained Modest

Consulting revenue grew 2% in the quarter. IBM said clients remain at different stages of AI adoption, and it expects only low to mid-single-digit consulting revenue growth for the full year.

Company Guidance

For 2026, IBM continues to expect revenue growth in the range of 4%-5%, with profit, free cash flow, and segment expectations anchored to a 4% base case, and has raised its expectation for free cash flow growth to more than $1 billion. Full-year software growth is expected to be approximately 7%-8%, with about 7% as the revised base case; hybrid cloud is expected to deliver double-digit growth, data mid-teens growth, automation low double-digit growth, transaction processing flat growth, infrastructure low double-digit infrastructure revenue growth, and consulting modest acceleration to low to mid-single digit revenue growth. IBM continues to expect 100 basis points of operating pre-tax margin expansion, while its operating tax rate expectation remains in the mid-teens, and it expects Red Hat to deliver double-digit growth in the fourth quarter of this year.

International Business Machines Risk Analysis

International Business Machines disclosed 25 risk factors in its most recent earnings report. International Business Machines reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added

0 New Risks

International Business Machines Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

IT:1IBM against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACN	84Outperform	$152.63B	18.90	26.77%	2.56%	6.47%	11.19%
INFY	80Outperform	$50.54B	20.95	34.59%	4.17%	-1.35%	3.37%
CTSH	77Outperform	$29.11B	11.86	17.36%	2.00%	4.96%	27.16%
WIT	70Outperform	$20.64B	15.55	15.94%	4.02%	0.38%	-8.33%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
KD	58Neutral	$3.01B	9.31	29.15%	―	-0.62%	-70.92%

* Technology Sector Average

Performance Comparison

IT:1IBM and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
IT:1IBM	International Business Machines Corporation	230.20	-29.52	-11.37%
ACN	Accenture Plc	258.24	18.16	7.56%
CTSH	Cognizant Technology Solutions	65.11	-6.02	-8.46%
INFY	Infosys	12.55	-3.56	-22.12%
WIT	Wipro Limited	2.16	-0.37	-14.49%
KD	Kyndryl Holdings Incorporation	13.83	-14.92	-51.90%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

International Business Machines AI Stock Analysis