Analysts remain largely split on IBM ‘s future after the tech stalwart posted key metrics that flashed warning signs heading into 2026. While IBM reported a third-quarter earnings and revenue beat , analysts pointed to metrics below the surface headline beat that might indicate a worrisome near-term setup for the stock: namely, softness in IBM’s Red Hat and transaction processing performance. “Driving the miss was RHT and TP growth decelerating by 2pts and 1pt vs. 2Q. respectively,” wrote Morgan Stanley analyst Erik Woodring. “Good results on the surface offset by softer than expected Red Hat and TP performance as we’re reminded of the importance of M & A for maintaining meaningful growth next year,” added JPMorgan analyst Brian Essex. Shares of IBM were last trading 1% lower on Thursday, but were down 8% on their lows of the day. Investors such as Stephanie Link, chief investment strategist at Hightower Advisors, and Malcolm Ethridge, managing partner at Capital Area Planning Group, took advantage of the selloff to buy more of the stock. IBM 1D mountain IBM, 1 day “The whole transition of this company, I don’t think is appreciated at all,” she said on CNBC’s ” Halftime Report ” Thursday afternoon. “People don’t believe in the software story. They don’t believe in the management.” Following IBM’s third-quarter print, analysts remained divided on their stance on IBM, with some still negative while others said to buy the dip. Here’s what analysts at some of Wall Street’s biggest shops had to say on the report. UBS: sell rating, $210 price target UBS lifted its forecast to $210 from $200. Analyst David Vogt’s target implies about 30% downside from Wednesday’s close. “IBM reported Q3 high-level results largely in-line with our expectations (link) led by 9% cc ‘Software’ growth, slightly better ‘Consulting’ revs but weak signings, with ‘Infra’ strength driving the revenue upside. However, under the covers, key software metrics are increasingly worrisome as we focus on CY26 while the strength in the z17 program to date (up 30% vs the z16, the strongest program in IBM’s history) creates a challenging comp issue next year.” Morgan Stanley: equal-weight, $252 Morgan Stanley’s forecast, down from $256, corresponds to downside of around 12%. “So where does this leave our 2026 CC revenue growth estimates? We believe this will increasingly become the debate into early 2026 given the headwinds we’ve called out in Software, the lack of material M & A tailwinds in 2026, Consulting only showing minor green shoots, and Infra becoming a Y/Y relative headwind to growth in 2026. … In general, we believe there is more downside, than upside, risk to these estimates, which if accurate, would put valuation at risk given the criticality of SW in supporting a premium multiple.” Bernstein: market-perform, $280 Bernstein’s target calls for 3% downside going forward. “We believe IBM is fully valued here both on P/E and SOTP basis. We see risk-reward as neutral to modestly negative, and rate the stock Market-Perform with an unchanged price target of $280.” JPMorgan: neutral, $290 Analyst Brian Essex’s forecast is 1% above IBM’s Wednesday closing price. “We continue to view IBM as a relatively defensive name with favorable exposure to Software, attractive exposure to AI tailwinds, and a healthy mainframe cycle currently in progress. We are adjusting our estimates to reflect the consolidated results and revised outlook this quarter, but remain Neutral rated as we view risk reward as balanced at current valuation levels.” Bank of America: buy, $315 Analyst Wamsi Mohan’s price target was approximately 10% higher than IBM’s closing price on Wednesday. “Despite the disappointing mix of SW growth, IBM raised F25 guidance for total rev growth in cc to more than 5%, PTI margin expansion of more than 1%, and FCF to ~$14.0bn. For RHT, mgmt. acknowledged the deceleration q/q (execution challenges and below model consumption services) and revised their F25 guidance to the ‘low end of mid-teens’ y/y growth. Reit. Buy as IBM is mixing up to higher margin Software and driving strong FCF and we expect continued positive estimate revisions.” Goldman Sachs: buy, $350 Goldman Sachs’ target equates to 22% upside. “We maintain our Buy rating on IBM, as we believe the company is on track to complete its pivot to long-term growth fueled by improving software growth and market share gains in consulting. We think the stock can re-rate higher as software mix improves and the company continues to demonstrate consistent financial performance.” — CNBC’s Michael Bloom contributed to this report. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
