New York, January 13, 2026, 15:44 EST — Regular session
- IBM shares fell about 3% in afternoon trade, underperforming a softer U.S. equity market.
- BofA lifted its price target on IBM but flagged a tougher setup into 2026 after last year’s run.
- Investors are looking ahead to late-January results for margin and cash-flow signals tied to software growth.
International Business Machines Corp shares slid about 3% on Tuesday, extending a pullback from last week’s levels as investors weighed fresh analyst caution and a risk-off turn across U.S. stocks.
The move matters because IBM is coming off a strong 2025, and the bar for guidance has moved up with it. Bank of America analyst Wamsi Mohan reiterated a Buy rating and raised his price target to $335, but he also pointed to a more difficult setup heading into 2026. 1
BofA expects IBM’s fourth quarter to show softer profit margins due to workforce “rebalancing” costs, pegging the expense at about $400 million. It forecast about 5% revenue growth in 2026 on a currency-adjusted basis (excluding foreign-exchange swings), led by roughly 10% growth in software, while consulting grows in the low single digits and infrastructure stays flat. 2
At 3:32 p.m. EST, the SPDR S&P 500 ETF was down about 0.5% and the Invesco QQQ ETF was off a similar amount, leaving IBM under more pressure than the broader tape.
Tuesday’s market tone was set earlier by U.S. inflation data. Consumer prices rose 0.3% in December and were up 2.7% from a year earlier, while core inflation — which strips out food and energy — rose 0.2% on the month and 2.6% year on year. 3
“Today’s data adds further support to the notion that inflation is trending down,” Preston Caldwell, chief U.S. economist at Morningstar, wrote in a note. 4
BofA said it rolled its valuation framework forward to calendar 2027 to better reflect IBM’s pending Confluent deal, and described conditions as a “tougher setup heading into 2026” after last year’s rally. 5
IBM announced in December that it would acquire Confluent for about $11 billion, pitching the deal as a way to build a smarter data platform for enterprise generative AI and related applications. 6
Still, the near-term risk case is straightforward: if consulting demand stays soft, restructuring costs prove stickier than expected, or deal timing slips, IBM may have less room to protect margins even if software keeps growing. A choppier rates backdrop can also pinch the valuation of slower-growth tech stocks.
Next up is IBM’s fourth-quarter 2025 earnings announcement, scheduled for January 28 (preliminary date), when investors will focus on the company’s 2026 outlook for software growth, consulting bookings and free cash flow. 7
