IBM Secures $9.5 Billion in AI Contracts, Raises Full-Year Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 30 2025
0mins
Should l Buy IBM?
Source: Fool
- Successful Transformation: In 2025, IBM secured $9.5 billion in AI-related business through consulting services and software, demonstrating its effective implementation of outcome-focused AI solutions for enterprise clients, thereby enhancing its competitive position in the market.
- Significant Market Opportunity: An MIT study indicates that 95% of AI pilot projects fail to yield meaningful returns, while partnering with AI vendors significantly increases success rates, which expands IBM's market opportunities in the enterprise AI sector due to its clear value proposition.
- Upgraded Financial Outlook: IBM raised its full-year outlook in October, expecting to generate approximately $14 billion in free cash flow, reflecting the strong performance of its AI business and showcasing the company's growth potential in this area.
- Investment Appeal: Despite a surge in IBM's stock in 2025, trading at just over 20 times free cash flow is considered reasonable given the growth potential of its AI business, making it an attractive investment option.
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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: 289.890
Low
210.00
Averages
315.80
High
375.00
Current: 289.890
Low
210.00
Averages
315.80
High
375.00
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.
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- Cybersecurity Market Expansion: Palo Alto Networks reported a record 3,322 data breaches in 2022, a 79% increase from 2020, highlighting strong demand for its cybersecurity services, with projected revenue growth of 14% this year and 13% next year, indicating sustained market leadership.
- IBM's AI Transformation: IBM achieved a 12% year-over-year revenue growth last quarter, primarily driven by sales of AI-capable mainframes and software, particularly strong in automation and data management, showcasing its enhanced competitiveness in the artificial intelligence race.
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