International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on skills integration for strategy, experience, technology, and operations by domain and industry. The Infrastructure segment provides on-premises and cloud based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, facilitates IBM clients' acquisition of hardware, software, and services. The company has a strategic partnership to various companies including hyperscalers, service providers, global system integrators, and software and hardware vendors that includes Adobe, Amazon Web services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.

IBM appears to be a mature business with strong profitability, but with a notable debt and liquidity burden, which limits re-rating potential. In terms of valuation multiples, the picture is mixed: P/E and P/FCF are below industry medians, which supports the idea of relative undervaluation; however, P/B is significantly above the median, which usually means the market is already pricing in high capital quality and earnings durability. P/S is roughly in line with the industry, so there is no clear discount on revenue. The company’s profitability is strong: ROE, ROA, and ROI are above the median, and profit margin as well as operating margin are also noticeably better than the industry, indicating good cost control and the ability to generate profit from current revenue. At the same time, margin trends over recent periods have generally improved, which is a positive signal for valuation. On the other hand, the current and quick ratios are below 1 and noticeably worse than the industry, so the buffer in working capital is limited. Debt-to-equity is very high relative to the median, and long-term debt remains large and has not declined much, which increases sensitivity to interest rates and to any deterioration in cash flow. Revenue, assets, and equity are generally growing, but not fast enough to fully offset the debt profile and the high balance-sheet valuation. Net income and operating income remain positive and support the investment case, but their absolute trend looks uneven, so the sustainability of growth still needs to be confirmed by the next reports. Dividend yield based on the latest data is effectively absent, so the dividend factor currently does not provide meaningful support to the valuation. Overall, the fundamentals look more high-quality than cheap: strong profitability and acceptable earnings/FCF multiples are balanced by a high balance-sheet valuation and weak liquidity. For an investor, this means fair value should be somewhat more conservative than the current baseline estimate, since the market has already partially priced in IBM’s strong operating metrics, while debt and working-capital risks have not yet disappeared.

International Business Machines Corporation

Сильный индекс, без изменений. Быки в растерянности.

Strong index, flat. The bulls are confused.

Сильный индекс, незначительно вырос. Рынок на стороне быков.

Strong index, slightly up. The market is on the bulls' side.

Сильный индекс, без изменений. Рынок не поддерживает медведей.

Strong index, flat. The market does not support the bears.

Средний индекс, незначительно упал. Приток средств в лонги на высоком уровне.

Medium index, slightly down. Inflow of funds into longs at a high level.

IBM has strong profitability and good P/E, P/FCF, and margins, but high debt, weak liquidity, and an expensive P/B constrain its valuation.

Looking at the universe of stocks we cover at Dividend Channel, in trading on Wednesday, shares of International Business Machines Corp (Symbol: IBM) were yielding above the 3% mark based on its quarterly dividend (annualized to $6.76), with the stock changing hands as low as $223.95 on the day. Dividends are particularly important for investors to consider, because historically speaking dividends have provided a considerable share of the stock market's total return. To illustrate, suppose for example you purchased shares of the S&P 500 ETF (SPY) back on 12/31/1999 — you would have paid $146.88 per share. Fast forward to 12/31/2012 and each share was worth $142.41 on that date, a decrease of $4.67/share over all those years. But now consider that you collected a whopping $25.98 per share in dividends over the same period, for a positive total return of 23.36%. Even with dividends reinvested, that only amounts to an average annual total return of about 1.6%; so by comparison collecting a yield above 3% would appear considerably attractive if that yield is sustainable. International Business Machines Corp (Symbol: IBM) is an S&P 500 company, giving it special status as one of the large-cap companies making up the S&P 500 Index.
In general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability at each company. In the case of International Business Machines Corp, looking at the history chart for IBM below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 3% annual yield.
IBM has been growing its dividend for more than 20 years consecutively. For more dividend growth stocks view our Dividend Aristocrats List on Dividend Channel.
Further IBM Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

International Business Machines (IBM) Shares Cross 3% Yield Mark

Itron Inc. ITRI reported non-GAAP earnings per share (EPS) of $1.59 for second-quarter 2026, which beat the Zacks Consensus Estimate by 22.3%. The company reported earnings of $1.62 per share in the prior-year quarter. The decline was primarily caused by lower interest income and a higher effective tax rate, which was moderated by growing non-GAAP operating income.
Itron generated second-quarter revenue of $563 million, down 7% year over year. The decline was largely attributable to weakness in the Networked Solutions segment, where revenue fell 17% because of project deployment timing and lower shipment volumes. This slowdown appears to be timing-related rather than demand-driven, as utilities continue investing heavily in grid modernization. Although headline revenue fell short of expectations, the underlying demand environment remains healthy, supported by increasing investments in grid resilience, electrification and infrastructure modernization.
The most encouraging takeaway was management's decision to raise its earnings guidance for 2026. Itron now forecasts non-GAAP EPS between $6.3 and $6.5, up from the prior view of $5.75-$6.25. The higher earnings outlook reflects continued strength in margin expansion, operational execution, demand from utility customers and integration of recent acquisitions. The company reaffirmed its full-year revenue outlook, narrowing the range to $2.37-$2.41 billion, with midpoint growth of 1% year over year. Revenue is expected to be back-end loaded, with second-half revenue projected to grow about 8% year over year and sequentially, consistent with prior expectations.
Itron, Inc. Price, Consensus and EPS Surprise
Product revenues were $453.5 million (80.6% of total revenues), down 12.3% year over year. Service revenues totaled $109.4 million (19.4%), up 22.2%.
At quarter-end, total backlog was $4.4 billion, only slightly below last year's $4.5 billion. Quarterly bookings totaled $550 million, demonstrating continued customer demand despite quarterly revenue fluctuations.
In response to a sizable backlog, expanded bottom line expectation, and continued investment in grid modernization and infrastructure resilience, ITRI’s shares soared 26.2% in trading and closed the session at $107.02 on July 28, 2026. The stock has gained 23.7% in the past month against the Zacks Electronics-Testing Equipment industry’s fall of 0.3%.
Image Source: Zacks Investment Research
Segments in Detail
Device Solutions (19.8% of total revenues): Revenue declined 1% (3% in constant currency or cc) to $111.4 primarily due to lower legacy electricity product sales. Our estimate was $113.1 million.
Networked Solutions (60.3%): Revenues dipped 17% to $339.2 million, primarily due to the timing of project deployments.
Outcomes (17.1%): Revenues rose 13% to $96.4 million, driven by growth in recurring and services revenue.
Resiliency Solutions (2.8%): Sales, bolstered by the Urbint and Locusview acquisitions, contributed $16 million, with integration progressing according to plan. We estimate the metric at $19 million.
Margin Strength Highlights Operational Improvements
Adjusted gross margin expanded to 41.4%, representing an impressive 460 basis-point improvement over the prior-year period. The margin expansion was driven by improved customer mix, higher-margin product mix, operational efficiencies and better execution across manufacturing and supply chains.
Non-GAAP operating expenses were $144 million, up from $141.4 million a year ago, reflecting the impact of the Urbint and Locusview acquisitions.
Non-GAAP operating income rose to $89 million from $82.2 million a year ago, as stronger gross profit more than offset higher operating expenses.
Balance Sheet & Cash Flows
As of June 30, 2026, cash and cash equivalents totaled $745.2 million compared with $1.1 billion as of March 31, 2026. Accounts receivable were $351.1 million.
As of June 30, net long-term debt was $1.6 billion, the same as of March 31.
Second-quarter operating cash flow reached $88 million compared with $97 million last year. Free cash flow totaled $81 million, down from $91 million. The decline mainly reflected higher tax payments and lower interest income. These were partially offset by favorable working-capital timing.
During the quarter, Itron repurchased $52 million of its shares through open-market buybacks under its existing share repurchase program.
Q3 2026 Outlook
For the third quarter of 2026, ITRI expects revenues to be between $590 million and $600 million, up 2% year over year at the midpoint.
Non-GAAP EPS is anticipated to be in the range of $1.5-$1.6, with about a 1% rise at the midpoint from last year.
ITRI’s Zacks Rank
Currently, Itron carries a Zacks Rank #4 (Sell).
Recent Performances
International Business Machines Corporation IBM reported relatively modest second-quarter 2026 results with adjusted earnings of $2.93 per share, up 5% year over year and in line with the Zacks Consensus Estimate. Revenues rose 1.1% to $17.16 billion but missed the consensus mark of $17.32 billion by 0.9%. The top-line miss reflected delayed large, capital-expenditure-sensitive software transactions and weaker IBM Z revenues.
Cadence Design Systems CDNS delivered strong second-quarter 2026 results, driven by broad-based demand for its AI-oriented portfolio amid robust design activity and new system architectures across hyperscaler infrastructure and physical AI. Non-GAAP earnings per share (EPS) of $2.11 beat the Zacks Consensus Estimate by 2.9%, increased 27.9% year over year and topped management’s guided range of $2.02 to $2.08. Revenues of $1.584 billion beat the Zacks Consensus Estimate by 0.5% and increased 24.2% year over year. The figure was within the management’s guided range of $1.555-$1.595 billion.
Progress Software Corporation PRGS reported second-quarter fiscal 2026 results wherein revenues came in at $253 million, up 7% year over year and 6% on a constant currency (cc) basis. ARR of $868 million inched up 2% year over year on a cc basis. PRGS reported a 16% year-over-year increase in non-GAAP earnings per share, which stood at $1.62.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

ITRI Q2 Earnings Top Despite Soft Revenues, Solid View Lifts Stock 26%

Key Points
IBM's miss revealed how rising hardware costs are shaping customer priorities.
Palantir and IBM both provide distinct solutions for the same enterprise AI build-out.
Revenue growth and margin expansion continue to accelerate for Palantir.
Shares of IBM (NYSE: IBM) fell 25% on July 14 after the company released preliminary second-quarter results. CEO Arvind Krishna explained that customers shifted their spending toward servers, storage, and memory as hardware prices continued to rise.
This caused spending delays on numerous large software deals, primarily in its mainframe and transaction-processing business. While enterprise demand for artificial intelligence (AI) infrastructure takes center stage, Krishna declared that "value will increasingly shift toward the orchestration and data layers" on its earnings call.
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The pure-play advantage
IBM has been building the governance and control layer that an organization needs to run its own AI. At the same time, Palantir Technologies (NASDAQ: PLTR) has carved a position in the market by turning enterprise data into decisions.
IBM's AI-related software includes Sovereign Core for auditable runtime control and the recently acquired Confluent for data streaming. It also launched Lightwell, a $5 billion commitment to help clients address open-source vulnerabilities.
Even if these efforts are successful, the company remains a multisegment incumbent, where software, consulting, and infrastructure each follow their own cycles.
Palantir, on the other hand, is a pure play on this theme. Its platforms, including Foundry and the Artificial Intelligence Platform, integrate an organization's data and run AI-powered applications.
Is the pullback an entry point?
In May, Palantir posted revenue growth of 85%, its 11th consecutive quarter of acceleration. This drove strong operating leverage, as margins expanded from 44% to 60% year over year.
Existing customers continue to ramp up spending, with net dollar retention at 150% and total remaining deal value climbing 98% to nearly $12 billion.
The trade-off for this concentrated exposure is a rich valuation, as the stock trades at roughly 39 times this year's sales and 67 times free-cash-flow guidance. IBM is cheaper at just 17 times forward earnings, but not necessarily more attractive, as each segment will perform differently in an AI-enabled future.
Meanwhile, after a 30% drawdown this year, Palantir's shares are beginning to look more reasonable. The growth runway is impressive, and the cash keeps piling up, but I'm not quite ready to pull the trigger yet.
Should you buy stock in Palantir Technologies right now?
Before you buy stock in Palantir Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $377,990!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,269,518!*
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*Stock Advisor returns as of July 26, 2026.
Bryan White has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends International Business Machines and Palantir Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

IBM Fell 25% as Hardware Spending Dominated AI Budgets. Palantir Sells What Runs on Top.

Key Points
IonQ's trapped-ion technology has achieved 99.99% 2-qubit gate fidelity and generated $64.7 million in Q1 2026 revenue -- a 755% year-over-year increase.
Rigetti's superconducting approach offers faster gate speeds but trails IonQ commercially, with just $4.4 million in Q1 revenue while targeting quantum advantage within three years.
Quantum computing has been a white-hot industry for investors, but who's actually winning the quantum computing race?
The answer depends on what you mean by "winning." If you're asking which company has made the most progress commercially, I think the answer is fairly straightforward: IonQ. But it's still early innings.
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If you're asking who will build the first truly useful quantum computer, that's a much more interesting question, and the truth is, it's much too early to tell that just yet.
Let's take a look at both IonQ and Rigetti Computing.
IonQ is building a full-stack quantum platform
IonQ (NYSE: IONQ) spent the last year transforming itself from a quantum computing developer into something more expansive. Company management now describes IonQ as a full-stack platform spanning computing, networking, sensing, and security.
Its underlying technology differs from many competitors, including Rigetti. IonQ builds trapped-ion quantum computers, a design generally associated with very high gate fidelity -- the accuracy of quantum operations -- but slower gate speeds than superconducting systems. The company reported a 2-qubit gate fidelity of 99.99% last year.
IonQ is also pushing aggressively into commercial deployment after a string of major acquisitions last year. During the first quarter of 2026, it sold the first of its newest 256-qubit system and expanded sales into more than 30 countries.
Rigetti is betting on superconducting speed
Rigetti Computing (NASDAQ: RGTI) builds superconducting quantum processors, the same general technology pursued by companies like IBM and Alphabet. These systems operate dramatically faster than trapped-ion machines, with gate speeds measured in tens of nanoseconds. But they also require extremely complex cryogenic cooling systems operating near absolute zero and generally struggle to deliver the same level of fidelity as IonQ's trapped-ion approach.
Rigetti finally launched its 108-qubit Cepheus-1-108Q processor and demonstrated a 2-qubit gate fidelity of 99.1%. CEO Subodh Kulkarni has said the company believes it can reach quantum advantage -- industry jargon for the point at which quantum computers outperform classical computers on commercially useful tasks -- in roughly three years if it reaches about 1,000 qubits while maintaining high fidelity and effective error mitigation.
How do IonQ and Rigetti compare financially?
IonQ generated $64.7 million in first-quarter revenue, a whopping 755% increase from a year earlier, while raising full-year guidance to between $260 million and $270 million. Its remaining performance obligations (RPO) -- contracted revenue that hasn't yet been recognized -- rose to a record $470 million. Perhaps most importantly, the company finished the quarter with roughly $3.1 billion in cash, cash equivalents, and investments.
To be sure, IonQ remains deeply unprofitable. Its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) loss guidance still calls for losses of more than $300 million this year. Management expects significant losses for the foreseeable future.
The company reported GAAP (generally accepted accounting principles) profit last quarter came almost entirely from a noncash accounting adjustment rather than operating earnings.
Rigetti operates on a different scale at the moment. The company generated just $4.4 million in first-quarter revenue while ending the quarter with $569 million in cash and no debt. Like IonQ, its reported GAAP profit resulted primarily from warrant accounting rather than its core business. Rigetti also continues to rely heavily on government development contracts while working toward larger hardware sales over time.
The quantum computing opportunity is massive -- but uncertain
McKinsey estimates quantum computing could eventually create between $1.3 trillion and $2.7 trillion in economic value by 2035. That's a huge opportunity, yes, but investors need to take it with a grain of salt and keep a few things in mind beyond the fact that McKinsey's is one of the more generous estimates.
First, that is the total value produced across the global economy. It's not a sales target for quantum firms. According to the same report, the slice of the pie for the producers themselves -- such as Rigetti and IonQ -- is just $60 billion to $100 billion.
Second, no one can say with any certainty when -- or even if -- true quantum advantage will be achieved at scale. It is entirely possible that a mature, revolutionary version of this technology is decades away. There are plenty of scientific voices outside the industry that are skeptical of the timelines put forth by quantum insiders.
The bottom line
At this point, I'd have to give the edge to IonQ, both in its technical abilities and its commercial success. That being said, I think excitement has outrun reality, and both companies are currently overvalued.
Should you buy stock in IonQ right now?
Before you buy stock in IonQ, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and IonQ wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $377,990!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,269,518!*
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, International Business Machines, and IonQ. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

IonQ vs. Rigetti: Who's Winning the $2.7 Trillion Quantum Computing Race?

Key Points
Software stocks have crashed throughout 2026 as new models from Anthropic and OpenAI flood the market.
Recent earnings reports from IBM and ServiceNow fueled further selling in the SaaS landscape.
While some pessimism is already priced into Palantir, shares face additional selling pressure heading into earnings.
Palantir Technologies (NASDAQ: PLTR) is scheduled to release its second quarter earnings on Aug. 3. Throughout 2026, Palantir stock has endured a difficult stretch -- falling about 30% as investors rotate out of enterprise SaaS names amid new model features from Anthropic and OpenAI.
While the decline in Palantir stock has already reset some of the optimism that supported shares in prior years, the upcoming report still carries the potential for another drop. Read on to learn why.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
What should investors expect from Palantir's Q2 report?
Wall Street's consensus estimates for Palantir's second-quarter revenue and earnings per share (EPS) are $1.8 billion and $0.35, respectively. This implies annual revenue growth of 80% and a 169% jump in earnings year over year.
During the company's first-quarter report, management guided toward a similar trajectory: Revenue of roughly $1.8 billion and adjusted operating margins that would support earnings near the $0.35 level.
Looking at proxies for Palantir's upcoming earnings report
Given earnings season has just started, there aren't too many comparable SaaS companies to benchmark Palantir against. For now, International Business Machines (NYSE: IBM) and ServiceNow (NYSE: NOW) provide timely comparisons.
IBM actually pre-announced its second quarter results on July 14, specifically citing softer demand in software. Shares fell roughly 25% that day, making it IBM's worst day in the stock market since 1987. The company's full Q2 report was later published on July 22. As of July 24, IBM has traded roughly flat compared to its historic sell-off earlier this month.
ServiceNow also reported its latest earnings on July 22. Shares initially dropped as much as 4% in the hours after the release, reflecting concern that a respectable quarter still fell short of the elevated bar plaguing the entire SaaS landscape this year. Of note, ServiceNow has since recovered and now trades roughly 2% higher than pre-report levels.
What's interesting is that Palantir stock actually rose as ServiceNow dropped following news of IBM's prelim report. However, since IBM and ServiceNow both published their full results for the second quarter, each stock witnessed incremental signs of recovery while Palantir stock has actually started showing some weakness.
Why Palantir stock could continue selling off
The obvious point to make is that there have only been a limited number of trading sessions since ServiceNow and IBM reported earnings -- limiting the amount of reliable data. The immediate sell-offs followed by a modest rebound leaves a mixed signal rather than a decisive trend.
With that said, even if Palantir meets or modestly exceeds expectations, the stock remains vulnerable to a further decline. Some investors regard Palantir as richly valued on both a price-to-sales (P/S) and price-to-earnings (P/E) basis, and the valuation drop so far this year has not fully erased the sense that expectations are elevated.
Compounding these views is the reality that agentic AI is still in the early stages of enterprise production deployment, creating uncertainty about how quickly Palantir can translate new applications into consistent, high-margin revenue.
In my eyes, a reasonable outcome for Palantir is a post-earnings decline around 5%, which would bring the shares from their recent level near $123 down to about $117. Such a move would reflect more of a continued recalibration of risk rather than a large-scale rejection of the company's long-term story, acknowledging that near-term catalysts remain clouded by both valuation premiums and execution questions.
Should you buy stock in Palantir Technologies right now?
Before you buy stock in Palantir Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $377,990!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,269,518!*
Now, it’s worth noting Stock Advisor’s total average return is 896% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of July 26, 2026.
Adam Spatacco has positions in Palantir Technologies. The Motley Fool has positions in and recommends International Business Machines, Palantir Technologies, and ServiceNow. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Prediction: Palantir Stock Will Drop to This Price After Aug. 3

Key Points
IBM’s steep one-day drop stems mainly from weaker mainframe and related software sales, not a clear structural break.
Investors are urged to wait for IBM’s detailed AI and revenue roadmap before stepping up their buying.
A stunning one‑day plunge has put IBM (NYSE: IBM) under the microscope, spotlighting mainframe softness, software timing, and its AI ambitions. Watch the video below to see what this stumble could mean for long‑term investors.
*This video was published on Jul. 23, 2026.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Should you buy stock in International Business Machines right now?
Before you buy stock in International Business Machines, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and International Business Machines wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $377,990!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,269,518!*
Now, it’s worth noting Stock Advisor’s total average return is 896% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of July 25, 2026.
Andy Cross has no position in any of the stocks mentioned. Asit Sharma, CPA has no position in any of the stocks mentioned. Jason Hall has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends International Business Machines. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

IBM Stock Just Suffered a Rare One-Day Plunge. Is This a Temporary Stumble or a New Risk for Investors?

Key Points
Figma shows stronger and more consistent revenue momentum compared to International Business Machines.
Figma posted uninterrupted quarter-over-quarter revenue growth, while IBM experienced ongoing volatility in its totals.
Investors should watch whether the two companies see their revenue growth trajectories converge or if the current growth gap continues to widen.
Figma: Sustaining Consistent Revenue Growth
Figma (NYSE:FIG) generates revenue by selling subscriptions to its collaborative, browser-based design and prototyping software.
It introduced new timeline-based animation tools at its annual conference in June 2026, and it reported approximately -43% net income margin for the quarter ended March 31, 2026.
IBM: Navigating Revenue Fluctuations
International Business Machines (NYSE:IBM) delivers comprehensive technology solutions, consulting services, and hybrid cloud infrastructure to global enterprise clients.
It disclosed a shortfall in preliminary results on July 14, 2026, while recording a 15% EBIT margin for the quarter ended June 30, 2026.
Why Revenue Matters for Retail Investors
Revenue shows investors the total money coming into a business before expenses are deducted. Tracking this figure helps investors understand the total scale and top-line growth trajectory of a business.
Quarterly Revenue for Figma and International Business Machines
Quarter (Period End)
Figma Revenue
International Business Machines Revenue
Q3 2024 (Sept. 2024)
$198.6 million
$15.0 billion
Q4 2024 (Dec. 2024)
$216.9 million
$17.6 billion
Q1 2025 (March 2025)
$228.2 million
$14.5 billion
Q2 2025 (June 2025)
$249.6 million
$17.0 billion
Q3 2025 (Sept. 2025)
$274.2 million
$16.3 billion
Q4 2025 (Dec. 2025)
$303.8 million
$19.7 billion
Q1 2026 (March 2026)
$333.4 million
$15.9 billion
Q2 2026
Not yet reported
$17.2 billion (period ended June 2026)
Data source: Company filings. Data as of July 24, 2026.
Foolish Take
Venerable IBM’s revenue towers over newcomer Figma’s sales, but that’s to be expected given the former has existed for over a century. IBM has transformed its business substantially over that time. It now focuses on the fast-growing artificial intelligence sector, providing software and cloud infrastructure for customers seeking to adopt AI, as well as an army of consultants to help clients navigate how to do so.
IBM’s volatile sales trend speaks to the choppy nature of selling hardware and consulting services. Its zSystems line of computer mainframes incorporating AI were a hot seller when they launched last year, but in the second quarter of 2026, Z sales were down 42% year over year. This combined with missing Wall Street’s Q2 revenue expectations amid the AI boom understandably worried investors, sending IBM shares to a 52-week low of $199.19 on July 23.
Figma’s revenue trend speaks volumes about the success of its business. The company’s Q1 sales of $333.4 million represented amazing 46% year-over-year growth as it continued to produce quarterly increases. That trend is expected to extend into Q2 with a forecast of revenue between $348 million to $350 million.
Figma’s design products are clearly winning over customers. Yet its stock fell to a 52-week low of $16.60 in April after Wall Street became concerned AI’s ability to quickly generate images on the fly would take business away from Figma. The company’s sales trend reveals this isn’t happening, and in fact, its business is thriving.
Should you buy stock in Figma right now?
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Robert Izquierdo has positions in Figma and International Business Machines. The Motley Fool has positions in and recommends Figma and International Business Machines. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Figma vs. IBM: What Revenue Growth Trends Tell Investors About the Young Software Design Company and the Veteran Artificial Intelligence Tech Giant

Big Banks Cash In, IBM Crashes Out

Key Points
Even with Caterpillar, industrials aren't the heaviest-weighted sector in the Dow.
GE Vernova equipment is in high demand for data center applications.
GE Vernova would need to issue a stock split to be considered for the Dow.
International Business Machines had its worst day in its history on July 14. So you may think that the blue chip dividend stock would drag down the Dow Jones Industrial Average, but that didn't happen. IBM has only a 2.3% weighting in the Dow, so its losses were more than offset by fellow Dow component Goldman Sachs, which has a 12.4% weighting and gained 9% that day.
This is just one of many examples when a Dow heavyweight has carried drastic underperformance from lower-weighted components. Ten of the Dow's 30 components are down year to date, but the Dow is up nearly 8% thanks to the overperformance of its top three heaviest weighted components. Goldman Sachs has the top weighting in the Dow and is up 23%, followed by Caterpillar (NYSE: CAT), which has a 10.3% weighting and is up 56%; and UnitedHealth Group, which has a 4.9% weighting and is up 30% on the year.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
The price-weighted Dow index can become unbalanced if a handful of stocks surge in price without issuing stock splits. Goldman Sachs is up 190% in the last five years, and Caterpillar has done even better, jumping 330%. Combined, these two stocks make up over 22% of the Dow.
Right now, the industrials sector has the second-highest overall weighting in the Dow, representing 19% of the index. I believe there's an industrial stock that would be an ideal component to join the Dow, but it would need Caterpillar to issue a stock split first to balance the index's industrial sector weighting. That stock is GE Vernova (NYSE: GEV) -- let's see if it's a good buy now.
A Caterpillar split could open the door for GE Vernova
GE Vernova has some history in the Dow. It was created by the 2023 split of General Electric, which was divided into GE Vernova, GE Healthcare Technologies, and GE Aerospace. GE was one of the original members of the Dow when it was founded in 1896, but was removed in 2018.
The three independent companies have collectively produced incredible gains for investors who held the original stock. GE Vernova is up a mind-numbing 700% since its spinoff and 533% in the last two years. The rapid rise has pole-vaulted its market cap to $282 billion -- making it the third most valuable U.S. industrial company behind Caterpillar and GE Aerospace.
But Caterpillar would likely need to split its stock to make room for GE Vernova so the industrial sector isn't overweighted in the index. Caterpillar has issued stock splits in the past; its most recent split came in 2005.
And which company would be removed from the index to make room for GE Vernova? A very logical seat change could be dropping Nike, given that the athletic wear company is hovering near a 12-year low and its turnaround is taking far longer than expected. Nike has the smallest weighting in the Dow, making up only 0.48% of the index.
GE Vernova is a candidate to split its stock as well
At just over $1,000 per share at the time of this writing, GE Vernova would need to issue a stock split of its own before being added to the Dow.
If Caterpillar issued a stock split and GE Vernova replaced Nike at its current price, the Dow's industrial sector weighting would increase even more, and GE Vernova would instantly become one of the most heavily weighted components alongside Goldman Sachs. The Dow typically adds stocks only if they are priced closer to the index's median weighting or have recently split their own shares, to avoid tilting the index's balance.
For example, Alphabet issued a 20-for-1 stock split in 2022 and was added to the Dow in June of this year. If GE Vernova issued a 4-for-1 split, it would be priced right around the median of the Dow components.
This hypergrowth industrial stock deserves a seat in the Dow
Given its industry-leading role in supplying industrial machinery, such as heavy-duty gas turbines, for AI data centers, GE Vernova stands out as a logical choice for adding another industrial component to the Dow.
Despite its massive run-up in recent years, GE Vernova fetches a surprisingly reasonable 30.8 price-to-earnings ratio because its earnings growth has kept up with its stock price appreciation. However, analyst consensus estimates have GE Vernova earning $30.64 in 2026 earnings per share (EPS) but just $24.48 in 2027 EPS.
Investors who believe we are still in the early innings of the AI infrastructure build-out may still want to buy GE Vernova, but it's worth noting that cyclical stocks can look cheap when their trailing earnings are in an expansion cycle, and then far more expensive as earnings compress during downturns. GE Vernova could pull back just as quickly as it ran up if there's a spending slowdown, making the stock ideally suited for risk-tolerant investors willing to endure volatility.
Should you buy stock in GE Vernova right now?
Before you buy stock in GE Vernova, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and GE Vernova wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $371,519!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,281,302!*
Now, it’s worth noting Stock Advisor’s total average return is 892% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Daniel Foelber has positions in Nike. The Motley Fool has positions in and recommends Alphabet, Caterpillar, GE Aerospace, GE HealthCare Technologies, GE Vernova, Goldman Sachs Group, International Business Machines, and Nike. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This Industrial Stock Is Up 533% in 2 Years. I Predict It Will Join the Dow if Caterpillar Issues a Stock Split.

The picture emerging from Q2 earnings is one of broad-based strength. Companies are comfortably beating consensus estimates—even as those forecasts were revised upward leading into the reporting cycle—while the overall pace of earnings growth continues to accelerate noticeably.
Through Thursday, July 23, we have received Q2 results from 121 S&P 500 members (representing 24.2% of the total index). Total earnings for these early reporters are up +72.1% year-over-year on +13.0% higher revenues, with 86.8% topping EPS estimates and 80.2% beating revenue estimates.
This performance represents a marked improvement for these 121 index members compared to their performance in recent quarters. The charts below illustrate how these Q2 EPS and revenue beat rates compare to both recent periods and historical averages.
Image Source: Zacks Investment Research
The Q2 earnings growth pace has been boosted by the blockbuster quarterly numbers from Alphabet GOOGL and Micron Technology MU. Alphabet's Q2 earnings increased +297.9% from the same period last year, with unrealized gain on the company's minority stake in SpaceX SPCX bosting the numbers. Micron's Q2 earnings were up +1350.1%, given the red hot demand for the company's memory products in the emerging AI world.
Excluding the contribution from Alphabet and Micron, Q2 earnings for the rest of the companies that have reported already would be up +17.6% (vs. +72.1% otherwise) on +9.4% higher revenues (vs. +13% otherwise).
The comparison charts below present the Q2 earnings growth pace relative other recent periods. The left hand chart shows the aggregate earnings growth picture for the 121 companies that have reported across recent quarters, while right-hand chart shows the earnings data excluding Micron and Alphabet.
Image Source: Zacks Investment Research
Any way you look at it, this is an impressive earnings picture and represents a market-friendly set up, notwithstanding headwinds from the geopolitical side.
For the more details about the Q2 earnings season and evolving expectations for the coming periods, please check out our weekly Earnings Trends report here >>>S&P 500 Q2 Earnings Beats Hit 5-Year Highs As Growth Accelerates
Zacks' Research Chief Names "Stock Most Likely to Double"
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Indicator	TTM Median
P/E	18.58 36.12
Price/Sales	2.90 2.84
P/B	5.99 3.23
P/FCF	15.44 24.48

Indicator	TTM Median
ROE	35.44 13.64
ROA	7.13 6.42
ROI	12.49 9.78
Net Worth	200.42 1.05
Quick Ratio	0.76 1.56
Current Ratio	0.80 1.89

Indicator	TTM Median
Net Profit Margin	15.61 9.59
Operating Margin	16.47 10.19
Gross Margin	58.36 50.00
Return on tangible equity	0.00 24.71

Indicator	TTM Median
EPS	2.93 0.30
EPS Forecast	2.93 0.24
Revenue	15.92B 74.00M
Gross Profit	8.95B —
EBITDA	2.96B —

International Business Machines Corporation

Recent quarterly and TTM performance

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