IBM: software, consulting and mainframes, and a stock that fell 25% in one day in July

IBM sells software — Red Hat hybrid cloud, automation, data and AI, and the transaction software that runs on its mainframes — along with consulting and infrastructure, mainly IBM Z mainframes, servers and support. In 2025 revenue was $67.5 billion, up 7.6%, and income from continuing operations $10.6 billion, or $11.14 a share. The stock closed at $253.22 on October 28, 2026, for a market value of $239.3 billion.

Software is 44% of revenue and earned a segment profit margin of 33.1% in 2025, against 11.7% for consulting and 22.0% for infrastructure. By region, the Americas were 49.4% of revenue, Europe, the Middle East and Africa 32.9% and Asia-Pacific 17.8%.

Deals, a spin-off and pension charges

IBM acquired Red Hat on July 9, 2019 — the largest acquisition in the company’s history, according to its 2026 proxy statement — and spun off its managed infrastructure services business as Kyndryl on November 3, 2021, giving shareholders one Kyndryl share for every five IBM shares. It bought HashiCorp in early 2025 for $7.4 billion and completed the purchase of Confluent on March 17, 2026 for $11.6 billion. Debt stood at $63.8 billion at the end of September 2026, including $12.7 billion in its financing business.

Two of those years were cut by pension settlement charges as IBM transferred pension obligations to insurers: $5.9 billion before tax in 2022, which reduced earnings per share by $4.84, and $3.1 billion in 2024, which reduced it by $2.57. Part of 2025’s 76% rise in profit reflects the absence of that charge. In the first nine months of 2026 revenue rose 4.9% to $50.2 billion and earnings per share from continuing operations rose to $5.86 from $5.27; IBM expects 2026 revenue to grow 4% to 5% at constant currency and free cash flow to rise by more than $1 billion, and does not give an earnings forecast.

Four big days in 2026

The stock reached a record close of $329.23 on June 2, 2026. On July 14, before the market opened, chief executive Arvind Krishna released preliminary second-quarter results in a letter to investors saying that what played out was worse than the company’s expectations, driven by a shortfall in IBM Z and the related software; the shares fell 25.2% that day. IBM also moved by 10% or more on February 23 (down 13.2%) and May 21 (up 12.4%), days with no company filing, and on May 29 (up 12.7%), the day after it outlined a plan to invest more than $10 billion in quantum computing over five years. On October 28 the stock was 23.1% below its June high and 19.0% lower than a year earlier.

At $253.22 IBM traded at 21.6 times continuing earnings of the last four quarters. The quarterly dividend is $1.69 a share, a yield of about 2.7%, and the company says it has paid quarterly dividends every year since 1916. Measured from the first close in the Yahoo Finance series, January 2, 1962, $1,000 of IBM stock would be worth about $34,700, or about $177,000 with dividends reinvested.

Who owns it, and who traded

Vanguard (10.03%), BlackRock (8.3%) and State Street (6.03%) are the holders above 5% in the 2026 proxy statement. Only four of the 38 investment managers this site tracks held IBM at the end of June, and all four added: Cliff Asness’s AQR had the largest stake, 2.7 million shares worth $742 million after a 42% increase, and Ken Griffin’s Citadel and Israel Englander’s Millennium more than doubled theirs. Those positions were valued at $281.21 a share on June 30, before the July drop.

Three directors bought shares in the open market in the twelve months to October 28, 2026, all small: David Farr $304,000 in January, and Michael Miebach and Michelle Howard a combined $113,000 on February 25, two sessions after the February drop. The only open-market sale was $5.8 million by Rob Thomas, senior vice president for software, in August, not reported under a trading plan. Krishna did not sell.

The figures above come from IBM’s 10-K, annual report and 10-Q filings, its 8-K reports, its proxy statement and the 13F, Form 4 and Form 144 filings. They describe what happened; they are not a forecast and not investment advice.