Dear IBM Stock Fans, Mark Your Calendars for July 23

International Business Machines Corp_ logo on storage rack-by Nick N A via Shutterstock

Artificial intelligence (AI) has become the silent architect behind the most transformative changes across global industries. In the middle of this monumental shift stands International Business Machines (IBM), better known on Wall Street as “Big Blue.”

Once seen as a sleeping giant of legacy tech, IBM has orchestrated a comeback that is now showing up where it matters most — the stock chart. So far in 2025, shares have surged more than 28%, driven by a calculated pivot toward hybrid cloud and AI.

With its second-quarter 2025 earnings report slated for release on July 23, IBM stock hovers near a 52-week high of $296.16, underscoring strong market interest. For investors eyeing dependable tech exposure, the stock presents an attractive opportunity.

Headquartered in Armonk, New York, IBM is a global IT powerhouse now steering hard into hybrid cloud and AI. The company is executing a platform-led model, designed to deliver value through both advanced technology and deep-rooted business expertise. With a market capitalization of $263 billion, IBM operates across four segments: Software, Consulting, Infrastructure, and Financing, each reinforcing the firm’s broader transition.

In the past 52 weeks, shares have climbed 54%, but the momentum has grown especially strong in the past three months. IBM has notched a 17% gain over that period, surpassing the broader S&P 500 Index’s ($SPX) 16% return in the same timeframe.

IBM stock trades at 26 times forward adjusted earnings and 4.2 times sales, both above industry norms, a valuation premium backed by actual performance.

Remarkably, the company has raised dividends for more than 25 consecutive years, earning it a place on the Dividend Aristocrats list. The company rewards shareholders with a forward annual dividend of $6.69, yielding 2.36%. The most recent quarterly dividend of $1.68 was paid on June 10 to investors of record as of May 9.

On April 23, IBM reported its Q1 2025 results, and the figures delivered more than the market bargained for. Revenue marginally grew year-over-year (YOY) to $14.5 billion, edging past analyst expectations of $14.4 billion. The software division carried much of the weight, climbing 9% YOY. Within that, Automation surged 15%, Red Hat advanced 13%, Data rose 7%, and Transaction Processing ticked up 2%.

Still, not all lines were up. Non-GAAP income from continuing operations fell 3% to $1.5 billion. Adjusted EPS slipped 4.8% to $1.60 from last year’s figure, although it still beat expectations of $1.43.

Importantly, the company generated $2 billion in free cash flow, its highest Q1 free cash flow in several years. This places IBM firmly on track to achieve its projected $13.5 billion in free cash flow for the full fiscal year.

IBM is putting serious capital behind its future. The firm has announced a $150 billion investment plan for the U.S. over the next five years, with over $30 billion earmarked to support domestic manufacturing of its mainframe and quantum systems.

Looking forward, management remains confident about the year. Growth drivers include the ramp-up of the z17 mainframe, expansion in software, and strategic acquisitions like HashiCorp. For Q2 2025, revenue is projected between $16.40 billion and $16.75 billion.

Meanwhile, analysts expect Q2 2025 EPS to rise 8.6% YOY to $2.64. Full-year EPS is forecast at $10.95, a 6% increase, with another 6.5% bump to $11.66 anticipated for fiscal 2026.

Analysts are taking notice of IBM’s execution, and the evolving sentiment reflects as much. Bank of America analyst Wamsi Mohan recently reaffirmed his “Buy” rating, raising the price target from $290 to $320. Meanwhile, Wedbush analyst Dan Ives is even more optimistic, recently lifting his estimate from $300 to $325.

Overall, the analyst consensus holds at “Moderate Buy.” Of the 21 analysts covering IBM stock, eight recommend a “Strong Buy,” one leans toward “Moderate Buy,” 10 advise “Hold,” and two recommend a “Strong Sell” rating.

The average price target stands at $263.70, but IBM stock currently trades above that level. Meanwhile, the Street-High target of $350 suggests a potential climb of 24% from current levels.

On the date of publication, Aanchal Sugandh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com