IBM trades at 21.4 times earnings, the second-highest valuation among five companies that also include Microsoft, Alphabet, Amazon.com and Accenture, yet it ranks fourth of the five in revenue growth over the latest four fiscal quarters. Compared with Accenture at 17.9 times earnings, IBM has a higher operating margin (18.3% versus 15.8%), while revenue growth is nearly even (6.8% versus 6.5%). IBM's software business, its largest, grew 10.6% to $30.0 billion in fiscal 2025, faster than its consulting arm, which grew 1.8% to $21.1 billion, and software growth reached 9% at constant currency in fiscal Q3 2026. Management kept its 2026 revenue growth forecast at 4% to 5% and expects software growth of about 7% to 8%, but said about a quarter of the software pickup came from large deals that slipped from the second quarter and that double-digit growth in transaction processing will not continue. The article argues that IBM's price appears to assume software keeps outgrowing the company as a whole long enough for overall growth to catch up.
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MSFT
• NeutralMicrosoft
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Systems Software |
| Market cap | $3.9T |
| Close on 10/23/2026 | 524.51 |
| Change that session | +0.66% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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