IBM (IBM): Assessing Valuation After Strong Q3 Earnings and Accelerated AI, Quantum Growth

International Business Machines (IBM) caught investors’ attention this week after reporting third-quarter 2025 results that topped forecasts. Revenue and margin growth were strong enough to push the company’s full-year guidance higher.

See our latest analysis for International Business Machines.

IBM’s impressive third-quarter earnings and increased high-profile AI and quantum partnerships have reinforced its transformation story, fueling a 6.6% share price return over the past month and a standout 53% total shareholder return in the last year. The recent gains build on strong momentum, as investors look past short-term volatility and focus on IBM’s accelerated innovation and multi-year growth outlook.

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With shares up more than 50% over the past year and forecasts for continued growth, the question is whether IBM’s stock still has room to climb or if today’s price already reflects its future potential.

Most Popular Narrative: 6.8% Overvalued

IBM’s last close at $307.41 sits above the narrative’s fair value estimate of $287.70 per share, challenging the excitement from recent momentum and raising questions about future upside at current levels.

The company maintains the largest and broadest ecosystem of advanced quantum computers. This provides a strong platform for future innovation and commercial opportunities.

Read the complete narrative.

Ever wondered which hidden assumptions about growth, margins, and innovation fuel the analysts' bold price estimate for IBM? The logic behind this fair value challenges conventional thinking. Can the optimism for quantum leadership really justify today's premium? Unlock the story behind these numbers for the full picture.

Result: Fair Value of $287.70 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, factors like potential consulting slowdowns and exposure to government spending cuts could quickly disrupt IBM’s trajectory if macroeconomic uncertainty intensifies.

Find out about the key risks to this International Business Machines narrative.

Build Your Own International Business Machines Narrative

If you want to dig into the numbers yourself or approach IBM’s outlook from a different angle, it’s easy to create your own view in under three minutes. Just Do it your way.

A great starting point for your International Business Machines research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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