International Business Machines Corporation (IBM), with a market capitalization of $231.6 billion, operates globally as a technology and consulting leader from its headquarters in Armonk, New York. Established in 1911, IBM has established itself as a pioneer in computing, artificial intelligence (AI), cloud services, and consulting.
Over the past year, IBM’s stock has significantly outperformed the broader market, experiencing a remarkable 49.9% increase in value over 52 weeks and climbing 13.4% year-to-date. In comparison, the S&P 500 Index has risen by 8.6% in the same period, while it is projected to decrease by 3.8% in 2025. Furthermore, IBM has surpassed returns from the Technology Select Sector SPDR Fund (XLK), which recorded a 6.3% gain over the past year.
Despite this impressive growth, IBM faced a setback on April 24, when its stock fell by 7.5% following the release of its first-quarter results that exceeded market expectations in sales and earnings. The downturn was attributed to disappointing sales in its consulting segment, which led to some investor skepticism regarding IBM’s potential in AI.
For the second quarter, IBM projects sales in the range of $16.4 billion to $16.75 billion and has reiterated its forecast for 5% sales growth and free cash flow expectations of $13.5 billion for the entire fiscal year. Analysts anticipate a year-over-year increase of 5.6% in non-GAAP earnings for the 2025 fiscal year, reaching $10.91 per share. IBM has consistently surpassed analysts’ earnings estimates, having done so for the last four quarters.
Currently, among 20 analysts monitoring IBM, the consensus rating has improved to “Moderate Buy,” up from “Hold” just three months ago. This reflects seven “Strong Buy,” one “Moderate Buy,” 10 “Hold,” and two “Strong Sell” ratings. An indication of increased confidence, this rating configuration is slightly more favorable than two months back when there were six “Strong Buy” recommendations.
Notably, analyst Daniel Ives of Wedbush reaffirmed his “Outperform” rating for IBM on May 7, setting a price target of $300, the highest forecast on Wall Street. This reinforces a positive outlook on IBM’s performance, with a consensus mean price target of $249.37, suggesting a slight premium over current market prices.
With its robust performance and optimistic projections, IBM continues to be a strong player in the tech sector, reflecting its potential for sustained growth and innovation in the coming months.