International Business Machines (NYSE:IBM) Shares Down 2.5% - Here's Why

Key Points

• IBM shares fell 2.5% to about $234 after quarterly revenue of $17.16 billion missed the $17.46 billion consensus estimate, despite adjusted earnings matching expectations at $2.93 per share. Revenue increased just 1.1% year over year, raising concerns about the pace of AI and hybrid-cloud growth.
• IBM continues expanding its technology initiatives, including a quantum-computing hub with Lockheed Martin in Switzerland and an open-source lunar AI model developed with NASA. These efforts strengthen IBM’s long-term research and government partnerships but have limited immediate revenue impact.
• Analysts maintain a generally positive outlook, with a consensus rating of “Moderate Buy” and an average price target of $265.90. IBM also declared a quarterly dividend of $1.69 per share, representing a 2.9% annualized yield, while a preliminary securities-law investigation adds legal uncertainty.

International Business Machines Corporation (NYSE:IBM - Get Free Report) shares traded down 2.5% on Thursday . The company traded as low as $231.83 and last traded at $234.0550. 5,340,230 shares were traded during mid-day trading, a decline of 31% from the average session volume of 7,731,067 shares. The stock had previously closed at $239.94.

International Business Machines News Roundup

Here are the key news stories impacting International Business Machines this week:

• Positive Sentiment: Quantum-computing expansion: IBM and Lockheed Martin are establishing a quantum innovation hub at ETH Zurich, with Switzerland’s first IBM Quantum System Two planned for the Swiss National Supercomputing Centre. The facility will support academic, enterprise and defense research in areas such as quantum sensing and advanced materials, strengthening IBM’s hardware, software and government-industry ecosystem. IBM and Lockheed Martin Announce Swiss Quantum Innovation Hub
• Positive Sentiment: NASA AI collaboration: IBM and NASA released an open-source Lunar Foundation Model trained on decades of lunar observations. The model reportedly improves identification of craters, ice deposits and volcanic formations by up to 23%, showcasing IBM’s AI capabilities and potential government-research applications, although the commercial impact remains long term. IBM and NASA Release Open-Source AI Model
• Neutral Sentiment: Quantum research validation: An IBM, Cleveland Clinic and RIKEN team reached the finals for the 2026 ACM Gordon Bell Prize after simulating a 12,635-atom protein using quantum-centric supercomputing. The recognition supports IBM’s technical credibility but has limited immediate revenue implications. Cleveland Clinic, RIKEN and IBM Gordon Bell Prize Finalist
• Negative Sentiment: Revenue missed expectations: IBM’s latest quarterly results matched the consensus EPS estimate, but revenue of approximately $17.16 billion fell short of the $17.46 billion consensus. The modest 1.1% year-over-year revenue growth reinforces concerns that IBM’s AI and hybrid-cloud investments are not yet accelerating overall growth.
• Negative Sentiment: Legal overhang: Hagens Berman said it is investigating potential securities-law violations related to IBM’s preview of weak second-quarter 2026 results. The allegation is preliminary and unproven, while a separate law-firm alert was withdrawn, but the headlines add uncertainty after the sharp earnings-related selloff. Hagens Berman IBM Investigation

Wall Street Analysts Forecast Growth

Several equities analysts recently commented on the company. The Goldman Sachs Group set a $270.00 target price on International Business Machines in a report on Thursday, July 23rd. Wall Street Zen raised International Business Machines from a "sell" rating to a "hold" rating in a research report on Saturday, August 29th. Morgan Stanley cut their target price on International Business Machines from $293.00 to $190.00 and set an "equal weight" rating on the stock in a research report on Thursday, July 23rd. Stifel Nicolaus lowered their price target on International Business Machines from $290.00 to $235.00 and set a "buy" rating for the company in a report on Monday, July 20th. Finally, Roth Capital reiterated a "buy" rating on shares of International Business Machines in a research note on Wednesday, June 3rd. Sixteen investment analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and one has given a Sell rating to the company's stock. Based on data from MarketBeat, International Business Machines presently has an average rating of "Moderate Buy" and a consensus price target of $265.90.

International Business Machines Trading Down 2.5%

The company has a 50 day simple moving average of $238.89 and a 200 day simple moving average of $246.54. The company has a current ratio of 0.79, a quick ratio of 0.74 and a debt-to-equity ratio of 1.63. The stock has a market capitalization of $220.51 billion, a PE ratio of 20.77, a P/E/G ratio of 2.21 and a beta of 0.71.

International Business Machines (NYSE:IBM - Get Free Report) last announced its earnings results on Wednesday, July 22nd. The technology company reported $2.93 earnings per share for the quarter, meeting the consensus estimate of $2.93. International Business Machines had a return on equity of 35.65% and a net margin of 15.52%.The company had revenue of $17.16 billion for the quarter, compared to the consensus estimate of $17.46 billion. During the same period last year, the business posted $2.80 EPS. The company's revenue was up 1.1% on a year-over-year basis. Analysts predict that International Business Machines Corporation will post 12.33 earnings per share for the current fiscal year.

International Business Machines Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Monday, August 10th will be issued a $1.69 dividend. This represents a $6.76 dividend on an annualized basis and a yield of 2.9%. The ex-dividend date of this dividend is Monday, August 10th. International Business Machines's payout ratio is currently 59.98%.

Insider Activity

In other news, SVP Robert Thomas sold 25,000 shares of the firm's stock in a transaction that occurred on Wednesday, August 26th. The stock was sold at an average price of $230.32, for a total value of $5,758,000.00. Following the completion of the sale, the senior vice president directly owned 47,800 shares of the company's stock, valued at $11,009,296. This trade represents a 34.34% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Company insiders own 0.27% of the company's stock.

Institutional Investors Weigh In On International Business Machines

Hedge funds and other institutional investors have recently bought and sold shares of the business. Orca Wealth Management LLC increased its holdings in International Business Machines by 3.7% in the fourth quarter. Orca Wealth Management LLC now owns 975 shares of the technology company's stock valued at $285,000 after buying an additional 35 shares in the last quarter. Friday Financial boosted its position in shares of International Business Machines by 1.9% in the 2nd quarter. Friday Financial now owns 1,903 shares of the technology company's stock worth $583,000 after buying an additional 35 shares in the last quarter. First Command Advisory Services Inc. raised its position in International Business Machines by 1.1% during the fourth quarter. First Command Advisory Services Inc. now owns 3,459 shares of the technology company's stock worth $1,025,000 after acquiring an additional 36 shares during the last quarter. HFM Investment Advisors LLC lifted its stake in International Business Machines by 2.2% in the 4th quarter. HFM Investment Advisors LLC now owns 1,684 shares of the technology company's stock valued at $499,000 after buying an additional 37 shares in the last quarter. Finally, Argent Advisors Inc. boosted its stake in shares of International Business Machines by 0.8% during the fourth quarter. Argent Advisors Inc. now owns 4,655 shares of the technology company's stock valued at $1,379,000 after acquiring an additional 37 shares during the last quarter. Institutional investors and hedge funds own 58.96% of the company's stock.

About International Business Machines

International Business Machines Corporation (IBM) is a global technology and consulting company that provides enterprise-focused hardware, software and services. Its offerings include hybrid cloud solutions, artificial intelligence, data and automation software, cybersecurity tools, IT infrastructure and technology consulting.

IBM develops and supports enterprise systems such as IBM Z mainframes, Power servers and storage products. Its software portfolio includes Red Hat hybrid cloud technologies, the watsonx platform for artificial intelligence and data management, application integration tools and cybersecurity solutions.

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