IBM Stock Recovers Slightly Amid Revenue Miss, Analysts Still Expect Significant Profits
IBM's stock price has steadied after a sharp decline in July following a disappointing Q2 revenue update. As of August 13, 2026, at 3:59 p.m. Eastern Time, IBM is trading at $236.71. Despite the modest rebound, investors remain cautious with a 0.31% gain on the day and an off-hours drop of 0.17%. Analysts still expect significant profits for full-year 2026, predicting earnings per share (EPS) of $12.33.
The Q2 results revealed only 1% total revenue growth compared to the prior year, with a net margin of 15.52% and return on equity of 35.65%. However, software revenue growth slowed to 5%, down from 14% in Q4 2025, with Transaction Processing revenue declining.
IBM's shift towards high-growth areas such as Data software and Hybrid Cloud is a strategic move to position itself as a key infrastructure provider for enterprise AI and cloud workloads. The company's recurring software revenue provides a cushion, responsible for around 80% of its software sales. Analysts expect steady earnings across the remaining quarters.
IBM's next earnings release is expected on October 21, 2026, giving management several months to demonstrate revenue trends aligning with guidance and stabilizing the story. The company's hybrid cloud and AI portfolio remains a strategic backbone of its business model, with Hybrid Cloud segment growth at 11% in Q2.