IBM Should I Buy
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IBM is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. Despite recent volatility and AI-related concerns, the company's strong financial performance, positive congressional trading sentiment, and resilience in its core business make it a solid long-term investment.
The technical indicators show a bearish trend with the MACD histogram below 0, RSI at 38.54 (neutral), and bearish moving averages (SMA_200 > SMA_20 > SMA_5). The stock is trading below its pivot level of 246.895, with support at 227.574 and resistance at 266.217. This suggests the stock is currently in a downtrend but nearing support levels.
IBM secured a $112 million contract with the Department of Defense, showcasing its strong presence in government contracts.
Congress trading data shows significant buying activity, with $4.1M median purchase transactions.
Strong Q4 financials with revenue up 12.15% YoY, net income up 92.18% YoY, and EPS up 90.29% YoY.
Concerns over AI disruption risks, particularly with IBM's Z platform and COBOL-based mainframe systems.
Recent analyst downgrades and price target reductions due to volatility in the software sector.
Bearish technical indicators and a 22% selloff in 2026.
IBM delivered strong financial results in Q4 2025, with revenue increasing by 12.15% YoY to $19.69 billion, net income rising by 92.18% YoY to $5.6 billion, and EPS growing by 90.29% YoY to $5.88. Gross margin also improved to 60.59%, up 1.88% YoY.
Analyst sentiment is mixed. UBS upgraded IBM to Neutral from Sell, citing balanced risk/reward after the recent selloff. Morgan Stanley lowered the price target to $247 due to AI disruption risks. Jefferies maintains a Buy rating with a $370 price target, emphasizing IBM's hybrid cloud and AI momentum. Overall, analysts are cautious but see potential upside in the long term.
