IBM Q4 2025 Earnings Highlights

Written by Emily J. Thompson, Senior Investment Analyst

IBM+0.1%

Source: seekingalpha

Updated: 2h ago

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Source: seekingalpha

Significant Revenue Growth: IBM achieved a 6% revenue growth in 2025, reaching $197 billion, marking the highest level in years, while free cash flow hit $14.7 billion, showcasing strong cash generation capabilities that bolster investor confidence.
Strong Software Performance: Software revenue grew by 9%, with Data and Automation segments increasing by 19% and 14% respectively, and three-quarters of subsegments delivering double-digit growth, indicating IBM's leadership and sustained demand in the software market.
Strategic Acquisition Impact: IBM announced the acquisition of Confluent, which is expected to absorb about $600 million in dilution in 2026, but is projected to positively impact adjusted EBITDA and free cash flow in the second year post-acquisition, further driving the company's growth strategy.
Optimistic Future Outlook: Management expects revenue growth to sustain above 5% in 2026, with free cash flow projected to increase by about $1 billion, and software revenue anticipated to grow by 10%, demonstrating IBM's ongoing competitiveness in the software-led and hybrid cloud markets.

IBM

$294.16+Infinity%1D

Analyst Views on IBM

Wall Street analysts forecast IBM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for IBM is 315.80 USD with a low forecast of 210.00 USD and a high forecast of 375.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

16 Analyst Rating

11 Buy

4 Hold

1 Sell

Moderate Buy

Current: 293.860

Low

210.00

Averages

315.80

High

375.00

Current: 293.860

Low

210.00

Averages

315.80

High

375.00

JPMorgan

Neutral

maintain

$290 -> $312

2026-01-21

Reason

JPMorgan

Price Target

$290 -> $312

AI Analysis

2026-01-21

maintain

Neutral

Reason

JPMorgan raised the firm's price target on IBM to $312 from $290 and keeps a Neutral rating on the shares. The firm expects IBM to report "solid" Q4 results led by acceleration in software, with strength in automation and Red Hat as transaction processing growth recovers. However, the shares are pricing in solid results at these levels, the analyst tells investors in a research note.

Evercore ISI

Outperform

maintain

$315 -> $330

2026-01-20

Reason

Evercore ISI

Price Target

$315 -> $330

2026-01-20

maintain

Outperform

Reason

Evercore ISI raised the firm's price target on IBM to $330 from $315 and keeps an Outperform rating on the shares, which were also added to the firm's "Tactical Outperform list" ahead of IBM reporting December-end quarterly results on Wednesday, January 28. The firm expects the company to deliver in-line to slight upside compared to consensus revenue and EPS estimates, with performance driven by Infrastructure strength and improvement in Consulting, the analyst tells investors. For 2026, the firm expects IBM to initially guide to growth that is at the lower end of their mid-single-digit target range and about $15B in free cash flow, the analyst added.

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RBC Capital

Outperform

maintain

$300 -> $350

2026-01-05

Reason

RBC Capital

Price Target

$300 -> $350

2026-01-05

maintain

Outperform

Reason

RBC Capital raised the firm's price target on IBM to $350 from $300 and keeps an Outperform rating on the shares. 2026 is likely to be a year when AI tailwinds become more evident for companies well positioned for enterprise AI adoption, while less prepared peers may remain pressured by the "AI is the death of software" narrative, the analyst tells investors in a research note. Enterprise spending appears to be stabilizing and improving in select areas, with GenAI driving innovation even as management teams remain conservative in early 2026 guidance, the firm says.

Erste Group

Hold -> Buy

upgrade

2025-12-05

Reason

Erste Group

Price Target

2025-12-05

upgrade

Hold -> Buy

Reason

Erste Group upgraded IBM to Buy from Hold following the "good" Q3 report. The firm sees the company's sales increasing more than expected in 2026. The shares should rally on IBM's positive outlook and price gains, the analyst tells investors in a research note.

About IBM

International Business Machines Corporation is a provider of global hybrid cloud and artificial intelligence (AI) and consulting expertise. The Company’s segments include Software, Consulting, Infrastructure and Financing. The Software segment includes hybrid cloud and AI platforms, which allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on integrating skills on strategy, experience, technology and operations by domain and industry. The Infrastructure segment is focused on the hybrid cloud infrastructure market, providing on-premises and cloud-based server and storage solutions. In addition, it offers a portfolio of life-cycle services for hybrid cloud infrastructure deployment. The Financing segment provides client and commercial financing, facilitating its clients’ acquisition of hardware, software and services. It helps clients in more than 175 countries.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.