What to Expect From International Business Machines' Next Quarterly Earnings Report

International Business Machines Corporation (IBM), headquartered in Armonk, New York, provides integrated solutions and services. With a market cap of $255.3 billion, the company offers analytics, IT infrastructure, cloud, business operations and automations, cybersecurity, data storage, application development, asset management, blockchain, software, and consulting solutions. The provider of global hybrid cloud and AI is expected to announce its fiscal second-quarter earnings for 2026 after the market closes on Wednesday, Jul. 22.

Ahead of the event, analysts expect IBM to report a profit of $2.96 per share on a diluted basis, up 5.7% from $2.80 per share in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates in its last four quarterly reports. 

For the full year, analysts expect IBM to report EPS of $12.39, up 6.9% from $11.59 in fiscal 2025. Its EPS is expected to rise 8.4% year over year to $13.43 in fiscal 2027. 

IBM stock has underperformed the S&P 500 Index’s ($SPX) 19.9% gains over the past 52 weeks, with shares down 4% during this period. Similarly, it notably underperformed the State Street Technology Select Sector SPDR ETF’s (XLK) 47.9% gains over the same time frame.

Investors are worried generative AI is eroding IBM’s COBOL modernization revenue. Combined with software margin pressure and peaking infrastructure demand, the legacy risk narrative is eclipsing IBM’s ambitions in AI and quantum.

On Apr. 22, IBM reported its Q1 results, and its shares closed down by 8.3% in the following trading session. Its adjusted EPS of $1.91 beat Wall Street expectations of $1.81. The company’s revenue was $15.9 billion, topping Wall Street forecasts of $15.7 billion.

Analysts’ consensus opinion on IBM stock is reasonably bullish, with a “Moderate Buy” rating overall. Out of 22 analysts covering the stock, 12 advise a “Strong Buy” rating, two suggest a “Moderate Buy,” seven give a “Hold,” and one recommends a “Strong Sell.” IBM’s average analyst price target is $303.59, indicating a potential upside of 9.2% from the current levels.