Should I buy IBM stock in 2025?

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At HelloSafe, our expert has been monitoring IBM’s performance for over three years. Each month, hundreds of thousands of users across Canada rely on us to interpret market trends and highlight the best investment opportunities. Our analyses are provided for informational purposes only and do not constitute investment advice. As prescribed by our ethical charter, we have never been, and will never be, compensated by IBM.

What is IBM?

How much is IBM stock?

The price of IBM stock is rising this week. As of today, IBM is trading at $241.82 USD, climbing 1.02% in the past 24 hours but showing a -1.49% change over the last week. The company’s market capitalization now stands at $224.75 billion, with an average three-month daily volume of 5.21 million shares.

IBM’s price-to-earnings (P/E) ratio is 41.41, offering a dividend yield of 2.81%, and its stock beta is 0.66—suggesting lower volatility than the broader market.

While IBM’s steady dividend and stable performance may appeal to Canadian investors seeking reliable income, its moderate volatility provides added reassurance in uncertain markets.

Our full analysis on IBM stock

After a comprehensive review of IBM’s latest financial results and a rigorous assessment of its stock over the past three years, we have synthesized quantitative data, technical indicators, and sector comparisons using proprietary algorithmic models. This approach reveals compelling signals—both from IBM’s transforming fundamentals and the wider technology landscape—that merit investor attention. Why might IBM stock once again provide a strategic entry point for Canadian and global investors in 2025?

Recent Performance and Market Context

IBM shares have demonstrated a notable rebound over the past year, trading at $241.82 as of May 1, 2025—a 45.5% year-over-year gain and 18.02% over six months. This positions the stock near the top of its 52-week range ($162.62–$266.45), reflecting persistent investor confidence amid short-term volatility (recent weekly decline of -1.49%). Market capitalization now approaches $225 billion, underscoring IBM’s enduring scale.

In Q1 2025, IBM achieved consistent revenue growth in core strategic segments, most notably Software, which saw revenue rise 7% YOY (9% at constant currency), led by double-digit gains in Hybrid Cloud (+12%) and Automation (+14%). This progress aligns with a favorable macro backdrop for enterprise tech, as digital transformation, increased AI adoption, and robust hybrid/multi-cloud demand are driving a global recalibration of IT spending.

With IBM’s generative AI book of business surpassing $6 billion and growing by over $1 billion in Q1 alone, the company is solidifying its role as a key enabler of next-generation infrastructure. This further cements IBM’s relevance within major secular growth trends while maintaining its blue-chip appeal to North American investors.

Technical Analysis

Analysis of IBM’s technical picture supports a bullish outlook, with several leading momentum indicators signaling a robust base:

• Relative Strength Index (RSI 14): At 54.85, IBM’s RSI is comfortably neutral, indicating the stock is neither overbought nor oversold, and suggesting room for further increases.
• Moving Average Convergence Divergence (MACD 12,26): The recent MACD at -0.7, though slightly negative, combined with an improving Commodity Channel Index (CCI at 86.1), implies a momentum shift toward buyers after a mild correction.
• Moving Averages: The stock’s 50-day average (240.6) stands above the 200-day (232.9), confirming a “golden cross”—a classic bullish signal indicating potential for sustained upward trends.
• Support and Resistance: The $203.34 support level, established by recent lows, offers a firm price floor, while resistance near $264.74 aligns with historic highs and represents a credible target should bullish sentiment accelerate.

With the stock now consolidating above both short- and long-term moving averages ($20-day MA at 237.3 and $100-day at 245.7), as well as generally rising volume, technical conditions favor accumulation strategies. IBM could be poised for a renewed bullish phase.

Fundamental Analysis

IBM’s fundamental outlook highlights a company firmly focused on advancing data-driven enterprise solutions and strong cash flow execution:

• Revenue and Profitability: Q1 2025 saw revenue rise to $14.5 billion (+1% YoY), with a shift toward high-margin software. Gross profit margin increased by 170 basis points YoY to 55.2%, demonstrating operating leverage, while software continues to drive resilience and growth.
• Earnings and Cash Flow: Diluted EPS of $1.12 (down YoY due to one-off tax effects in 2024) is backed by strong operating cash flow ($4.4 billion) and $2.0 billion in free cash flow—highlighting disciplined capital allocation and balance-sheet strength.
• Valuation: The stock trades at a trailing P/E of 41.41 and a forward P/E of 21.83. While trailing P/E is high (due to accounting quirks in previous quarters), the forward multiple is attractive versus IBM’s historical average and peers, especially considering growth in AI and hybrid cloud. A Price/Sales ratio of 3.58 and stable Price/Book of 8.28 support a valuation justified by IBM’s strong cash generation and market position.
• Structural Strengths: Innovation cycles, a sharp focus on generative AI and automation, and brand equity underpin durable client relationships. Institutional ownership above 64% provides strong, stable demand.
• Dividend Consistency: Thirty consecutive years of dividend growth (yield: 2.81%), with a forward payout of $6.72/share, further distinguish IBM in a sector where stability is increasingly rare.

Volume and Liquidity

Trading volumes have remained strong, with a three-month average daily volume of 5.21 million shares. High liquidity ensures tight bid-ask spreads, facilitating efficient transactions for both institutional and active retail investors. Consistent institutional activity supports dynamic price discovery and responsiveness to new catalysts.

Catalysts and Positive Outlook

Several key catalysts could accelerate IBM’s share price through 2026:

• Generative AI Expansion: With over $6 billion in business and persistent growth, IBM’s leading role in enterprise AI adoption continues to strengthen. Deeper penetration in industry verticals and a focus on responsible, explainable AI should support premium valuation.
• Strategic M&A: The acquisition of HashiCorp enhances IBM’s hybrid cloud and automation platform, unlocking revenue synergies and innovation as organizations prioritize secure multi-cloud operations.
• Product Innovation: Growth in hybrid cloud, Red Hat-powered solutions, and increasing automation underline a product roadmap tightly aligned with C-suite priorities.
• Consistent ESG and Governance Leadership: IBM’s environmental and social responsibility record is increasingly valued by institutional clients, strengthening its competitive position.
• Macro Tailwinds: Elevated IT spending, favorable regulatory environments, and robust North American demand all support continued strength across segments.

Management’s Q2 2025 revenue guidance ($16.40–$16.75 billion) and a full-year free cash flow target near $13.5 billion reinforce IBM’s operational visibility and confidence.

Investment Strategies

IBM’s present technical and fundamental backdrop points to several diversified entry strategies:

• Short-Term: Traders may look to accumulate on consolidations near $237–$245, targeting breakouts towards resistance at $265. Increased volatility around earnings or product news may provide swing trading opportunities.
• Medium-Term: Investors with a 6–18 month horizon may hold through catalysts such as HashiCorp integration or new AI client wins, adding on technical pullbacks or ahead of key milestones for enhanced returns.
• Long-Term: Those seeking a blue-chip core holding may be attracted to IBM’s predictable cash flow, consistent dividends, and innovation leadership. Ongoing digital transformation and competitive innovation suggest continued shareholder value.

In all timeframes, a disciplined approach—aligning portfolio objectives with technical markers (support at $203, breakout above $265) and focusing on upcoming milestones—may position investors for both growth and reliable income.

Is It the Right Time to Buy IBM?

A synthesis of IBM’s recent market trends, technical signals, and fresh growth drivers reveals a blue-chip technology stock poised for a sustainable bullish phase. Core strengths include:

• Accelerating growth in high-margin, future-oriented areas (AI, hybrid cloud, automation)
• Consistent, inflation-protected dividends—rising for 30 straight years
• Robust institutional support and liquidity, reducing volatility risk
• A favorable technical structure (golden cross, strong support) for further accumulation
• Clear near- and long-term catalysts, from M&A to ongoing digital transformation

Despite valuation multiples remaining above historic medians, IBM’s current and forward ratios are justified by robust cash flows and rapid product innovation. Should IBM deliver on AI/cloud targets and meet or exceed forthcoming results, the stock appears positioned for further gains in 2025.

IBM offers an attractive investment for those seeking both growth and stability from a global tech leader. The combination of strong technicals, resilient fundamentals, and continued innovation suggests that renewed investor interest may be well justified as 2025 unfolds.

For investors focused on market timing and strong fundamentals, IBM stock presents a uniquely balanced opportunity with strong upside potential into 2025.

How to buy IBM stock in Canada?

Buying IBM stock online is straightforward and secure for Canadian investors, especially when using a regulated broker. Today’s digital platforms give you access to global shares, including IBM, in just a few clicks—all while ensuring your funds and data are protected by rigorous oversight. You can choose between two main ways to invest: buying IBM shares outright (“spot buying”) or trading via Contracts for Difference (CFDs), which let you speculate on price changes. Each method has its pros and specific costs. To help you pick, you’ll find a broker comparison tool further down this page.

Spot Buying

Spot buying means you purchase IBM shares directly through a brokerage account, making you a registered shareholder eligible for dividends and voting rights. In Canada, brokers typically charge a fixed commission for each order, usually around $4.99 to $9.99 CAD per trade. Let’s look at a practical example:

Practical Example

Suppose IBM is trading at $241.82 USD (approximately $330 CAD at an exchange rate of 1.36). With a $1,000 CAD investment and a $5 brokerage fee, you could buy about 3 shares:

• $1,000 – $5 = $995 available for investing
• $995 / $330 ≈ 3 shares of IBM

✔️ Gain scenario:
If IBM’s USD share price rises by 10%, your holding is now worth about $1,100 CAD.
Result: +$100 gross gain, or +10% on your invested amount, not accounting for currency fluctuations.

Trading via CFD

Trading IBM shares via CFDs means speculating on IBM’s price without owning the shares outright. CFDs allow you to trade both upward and downward price movements and offer leverage—meaning you can multiply your market exposure with a smaller initial outlay. Fee structures typically include a spread (the difference between buy and sell prices) and overnight financing charges if you hold positions open beyond a day.

Example

With a $1,000 CAD stake and 5x leverage, your exposure to IBM stock equals $5,000.
If IBM’s price moves up by 8%, your position gains 8% x 5 = 40%.
Result: +$400 gain on your $1,000 outlay (not including spreads or financing fees).

Final Advice

Before you invest, it’s essential to compare broker fees, commissions, spreads, exchange rates, and platform conditions to find the solution best suited for your needs. Whether you choose the long-term approach of owning actual IBM stock or the more flexible CFD trading route depends mainly on your personal goals and risk profile. For an up-to-date comparison, review the broker table available further down this page. Invest wisely and always consider your objectives before making a choice.

Platforms

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Star Trader

4.9

Minimum Deposit

$50

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4.8

Minimum Deposit

$1

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Avatrade

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$100

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Our 7 tips for buying IBM stock

The latest news about IBM

IBM increased its quarterly cash dividend for the 30th consecutive year, reinforcing its appeal for income investors. On April 30, 2025, IBM’s Board of Directors announced a raise in the quarterly cash dividend to $1.68 per common share, continuing an uninterrupted streak of annual dividend hikes over three decades. This ongoing commitment underscores IBM’s focus on shareholder returns and is particularly significant for Canadian investors seeking stable and reliable dividend income from US-listed technology stocks. The upcoming ex-dividend date is May 9, 2025, making it immediately relevant for portfolio calendars in Canada, particularly as dividends from IBM are subject to the Canada-US tax treaty, allowing for more favorable withholding rates compared to other jurisdictions.

IBM completed the acquisition of HashiCorp, expanding its hybrid cloud and AI capabilities in North America. In late April 2025, IBM finalized its acquisition of HashiCorp, a leader in multi-cloud infrastructure automation. This strategic move strengthens IBM’s hybrid cloud offerings and positions the company to deliver greater value in automation and cloud management—a segment seeing robust adoption by Canadian enterprises and government agencies transitioning to more diverse and secure cloud architectures. The integration of HashiCorp is expected to accelerate IBM’s partnerships and product deployments across North America, including Canada, where digital transformation initiatives and compliance needs make trusted cloud and AI infrastructure particularly relevant.

IBM’s robust Q1 2025 results highlighted solid gains in software and generative AI, supporting long-term North American growth potential. IBM’s first-quarter 2025 results, disclosed on April 23, showed total revenue growth of 1% year-over-year to $14.5 billion (2% at constant currency), with software revenue up 7% and the generative AI book of business surpassing $6 billion in value. These segments are central to Canadian business and public sector innovation efforts, as organizations increasingly allocate budgets to digital modernization and artificial intelligence applications. IBM’s North American profile is strong, with strategic partnerships across governments, financial institutions, and energy firms in Canada, benefiting from the company’s expanding AI, security, and hybrid cloud portfolios.

The technical indicator "golden cross" has emerged, marking a bullish signal for IBM’s share price momentum. According to data from May 1, 2025, IBM’s 50-day moving average remains above its 200-day moving average, a technically positive “golden cross” pattern. Such a formation is often seen by professional market participants—including those in Canadian wealth management—as a long-term uptrend indicator. Enhanced by IBM’s relatively low beta of 0.66, which signals less volatility than the general market, the stock is positioned as a defensible holding for Canadian investors seeking both growth exposure and downside risk mitigation, especially as the RSI remains in a neutral range, allowing further room for appreciation.

IBM’s guidance for 2025 confirms at least 5% constant currency revenue growth and $13.5 billion in free cash flow, sustaining positive outlooks for capital allocation and Canadian investor confidence. During its Q1 2025 results presentation, IBM reaffirmed its targets for at least 5% revenue growth at constant currency and approximately $13.5 billion in free cash flow for the year. This guidance demonstrates strong operational discipline and visibility, supporting ongoing investment in employee talent, R&D, and North America-focused initiatives. The ability to reliably generate substantial cash flow is a key consideration for Canadian institutional investors and pension funds that prioritize stable, large-cap technology names for long-term asset allocations, particularly as IBM looks to reinforce its leadership in AI and hybrid cloud—segments increasingly critical in Canada’s digital economy.

FAQ

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.