International Business Machines Stock Outlook: Is Wall Street Bullish or Bearish?

International Business Machines Corporation (IBM), headquartered in Armonk, New York, provides integrated solutions and services. With a market cap of $219.9 billion, the company offers analytics, IT infrastructure, cloud, business operations and automations, cybersecurity, data storage, application development, asset management, blockchain, software, and consulting solutions.

Shares of this provider of global hybrid cloud and AI have underperformed the broader market over the past year. IBM has declined 7.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 21.5%. In 2026, IBM stock is down 21.2%, compared to the SPX’s 12.6% rise on a YTD basis. 

Narrowing the focus, IBM’s underperformance is also apparent compared to the State Street Technology Select Sector SPDR ETF (XLK). The exchange-traded fund has gained about 40.9% over the past year. Moreover, the ETF’s 28.7% returns on a YTD basis outshine the stock’s losses over the same time frame.

IBM’s underperformance stemmed from a late-June pullback in enterprise spending as clients prioritized securing AI infrastructure amid supply constraints. Management stressed demand remained intact, pointing to a $500 million infrastructure backlog as evidence of pending revenue.

On Jul. 22, IBM shares fell over 2% after reporting its Q2 results. Its adjusted EPS of $2.93 matched Wall Street expectations. The company’s revenue was $17.16 billion, missing Wall Street forecasts of $17.17 billion.

For the current fiscal year, ending in December, analysts expect IBM’s EPS to grow 6.5% to $12.34 on a diluted basis. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.

Among the 24 analysts covering IBM stock, the consensus is a “Moderate Buy.” That’s based on 11 “Strong Buy” ratings, two “Moderate Buys,” 10 “Holds,” and one “Strong Sell.”

This configuration is less bullish than a month ago, with 12 analysts suggesting a “Strong Buy.”

On Jul. 24, Susquehanna analyst James Friedman maintained a “Hold” rating on IBM and set a price target of $225. 

The mean price target of $251.87 represents a 7.9% premium to IBM’s current price levels. The Street-high price target of $365 suggests an ambitious upside potential of 56.4%.