Key statistics

Is IBM a good stock to buy in 2026?

IBM stock presents a compelling case with a DCF fair value of $437.54, suggesting a significant 92.7% undervaluation. While its P/E ratio of 19.82x is slightly above the sector average of 18.7x, 44.0% of analysts rate the stock a Buy. This blend of strong intrinsic value and positive analyst sentiment warrants a closer look for investors, though it is not investment advice.

2026 IBM price scenarios

Based on analyst consensus of $309.64 from 50 analysts. Not a prediction by Alert Invest.

About International Business Machines Corporation (IBM)

International Business Machines Corporation provides integrated solutions and services worldwide. The company operates through four business segments: Software, Consulting, Infrastructure, and Financing. The Software segment offers hybrid cloud platform and software solutions, such as Red Hat, an enterprise open-source solutions; software for business automation, AIOps and management, integration, and application servers; data and artificial intelligence solutions; and security software and services for threat, data, and identity.

Under the leadership of CEO Arvind Krishna, International Business Machines Corporation (IBM) continues its transformation, focusing heavily on hybrid cloud and artificial intelligence. With approximately 270,300 employees worldwide, IBM leverages its extensive expertise and research capabilities to deliver innovative solutions across various industries. Its distinctive strengths lie in its deep enterprise client relationships, robust intellectual property portfolio, and a strategic shift towards higher-growth, recurring revenue models that capitalize on digital transformation trends.

IBM competitive moat and business analysis

IBM’s competitive advantage stems from its long-standing relationships with large enterprise clients and its significant investments in proprietary technologies, particularly in the hybrid cloud and AI space. While the reported net margin of 15.61% indicates solid profitability, the ROE and ROIC are N/A from the provided data, preventing a direct comparison of capital efficiency. However, a robust gross margin of 58.97% suggests strong pricing power and cost management within its core offerings. The company’s extensive patent portfolio and global delivery network also act as substantial barriers to entry for competitors.

Although specific segmental and geographical breakdowns for fiscal year 2025 are not detailed in the provided data, IBM’s strategy clearly emphasizes its Software and Consulting segments as primary revenue drivers. The company’s Software segment, powered by Red Hat, provides critical hybrid cloud and AI platforms, alongside enterprise automation and security solutions. The Consulting segment leverages IBM’s deep industry knowledge to help clients implement and manage complex digital transformations. Geographically, IBM operates across all major global markets, diversifying its revenue streams and mitigating regional economic risks.

IBM’s moat is evolving from its traditional hardware and services to a more software- and consulting-centric model. The reported revenue growth of 7.6% (YoY) suggests that the strategic pivot initiated under CEO Arvind Krishna is yielding positive results, indicating a steady expansion in its addressable markets. While no specific transcript quote is available to provide direct management commentary, this revenue trend implies successful execution of their go-to-market strategies and a growing demand for their hybrid cloud and AI solutions. This transition is crucial for strengthening its competitive position in the rapidly changing technology landscape.

When assessing IBM stock against its peers, a comparison reveals different strategic and financial profiles. For instance, IBM vs ACN (Accenture) highlights differences in their consulting pure-play versus integrated solutions approaches. Comparing IBM vs CRM (Salesforce) brings to light IBM’s broader enterprise technology footprint against Salesforce’s dominant position in cloud-based customer relationship management. Lastly, a look at IBM vs CSCO (Cisco) contrasts IBM’s hybrid cloud and AI focus with Cisco’s network infrastructure stronghold. Each comparison provides unique insights into how IBM’s distinct strategy plays out in the wider Technology sector.

International Business Machines Corporation analyst rating

Based on 50 analysts. 44.0% rate IBM Buy or Strong Buy.

A 44.0% Buy rating for IBM stock, with an additional 48.0% Hold, suggests a relatively positive outlook among analysts within the Technology sector, though not overwhelmingly bullish. For a large-cap technology company like IBM, this level of analyst confidence typically signifies stability with potential for appreciation.

Is IBM undervalued or overvalued?

When evaluating IBM valuation, the P/E ratio stands at 19.82x, which is slightly above the Information Technology Services sector average of 18.7x. This indicates that investors are currently paying a small premium for IBM stock compared to its industry peers on an earnings basis. Despite this, a deeper dive into other valuation metrics is essential to determine if IBM is a good stock at its current price.

Crucially, a Discounted Cash Flow (DCF) model estimates IBM’s fair value at $437.54, suggesting a significant 92.7% undervaluation relative to its current price. This substantial difference in DCF fair value provides a strong argument for potential upside in IBM stock. However, other metrics like the P/B ratio of 6.46x suggest a more expensive valuation relative to its book value, requiring investors to weigh these different perspectives.

IBM financial health & key metrics

For value investors considering if IBM is a good stock, the financial metrics present a mixed but generally appealing picture. While the debt-to-equity ratio of 2.14x is high, and the P/E ratio of 19.82x is slightly above the sector average, the strong free cash flow yield of 6.13% and robust net margin of 15.61% are highly attractive. Furthermore, the DCF fair value indicating significant undervaluation suggests that IBM stock could offer a considerable margin of safety and upside potential, especially given its steady 7.6% revenue growth.

International Business Machines Corporation earnings history & next report

International Business Machines Corporation reported EPS of $1.91, beating estimates by 5.52%. Next earnings: 2026-07-22 with EPS estimate of $2.98.

As International Business Machines Corporation approaches its next earnings report on 2026-07-22, with an estimated EPS of $2.98, investors will be keenly watching for continued growth in its strategic segments, particularly hybrid cloud and AI. Key areas to observe include the performance of Red Hat, client adoption rates for its AI solutions, and any updates on cost management initiatives. Any guidance provided on future revenue and profitability trends will be crucial in assessing the trajectory of IBM stock.

IBM daily short volume

Short volume data from FINRA CNMS Consolidated — shares sold short in the most recent US trading session. A high short ratio can signal bearish conviction or a potential short squeeze. Updated every trading day.

IBM insider trading activity

Corporate insiders must report trades to the SEC within two business days.

Source: SEC Form 4 via EDGAR · Data: Financial Modeling Prep · Not investment advice

Recent IBM analyst rating changes

International Business Machines Corporation stock news today

How does IBM compare to its peers?

Understanding how IBM stock stacks up against its industry peers provides crucial context for investors. While IBM has a unique position as a legacy tech giant reinventing itself through hybrid cloud and AI, examining other leading Information Technology Services companies offers insight into competitive pressures and market dynamics. Here’s how some of its key competitors compare.

FAQ — International Business Machines Corporation (IBM) stock