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. Its P/E ratio of 21.24 is below the industry median, and its P/FCF is also below the market, which supports the valuation and suggests a reasonable price relative to cash flow. At the same time, P/B and P/S remain above industry medians, so the market is still paying a premium for the quality and resilience of the franchise. ROE of 35.44%, ROA of 7.13%, and ROI of 12.49% are above the median and generally confirm high capital efficiency. Profit margin of 15.61%, operating margin of 16.08%, and gross margin of 58.36% are also strong and have generally remained stable in recent periods, which is a positive for valuation. Revenue, operating income, and net income by year do not appear to be growing linearly, but current levels remain high and profitability is noticeably better than that of the average industry player. On the other hand, current and quick ratios of 0.79 and 0.74 are very weak, which limits the balance sheet’s margin of safety. A debt/equity ratio of 1.75 and long-term debt of about $57.7 billion indicate a significant debt burden, increasing sensitivity to interest rates and worsening the risk profile. A dividend yield of about 0.72% looks too low to be a strong valuation support factor for an income-oriented investor. Return on tangible equity is zero, which does not add quality in the eyes of a conservative investor. Overall, the fundamentals support a moderately cautious view: the business is high-quality and profitable, but the balance sheet is not ideal, and some multiples already reflect a premium for resilience. Therefore, only a slight downward adjustment to the forecast is appropriate, rather than a sharp discount revision.

International Business Machines Corporation

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Слабый индекс, без изменений

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.

Слабый индекс, незначительно упал

Сильный индекс, без изменений. Приток средств в шорты на высоком уровне.

Strong index, flat. Inflow of funds into shorts at a high level.

IBM is profitable and has strong margins, but high leverage and weak liquidity limit upside, despite reasonable P/E and P/FCF.

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the State Street Technology Select Sector SPDR ETF (Symbol: XLK) where we have detected an approximate $157.4 million dollar outflow -- that's a 0.1% decrease week over week (from 651,661,794 to 650,811,794). Among the largest underlying components of XLK, in trading today International Business Machines Corp (Symbol: IBM) is up about 2.9%, Salesforce Inc (Symbol: CRM) is up about 1.8%, and Seagate Technology Holdings PLC (Symbol: STX) is lower by about 2.6%. For a complete list of holdings, visit the XLK Holdings page » The chart below shows the one year price performance of XLK, versus its 200 day moving average:
Looking at the chart above, XLK's low point in its 52 week range is $126.68 per share, with $198.73 as the 52 week high point — that compares with a last trade of $188.50. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Further XLK Research:

State Street Technology Select Sector SPDR ETF Experiences Big Outflow

International Business Machines Corporation IBM is expanding its quantum computing footprint by establishing a new quantum innovation hub at ETH Zurich in collaboration with Lockheed Martin Corporation LMT. The project plans to bring an IBM Quantum System Two to the Swiss National Supercomputing Centre in Lugano.
Under an offset agreement with armasuisse, Switzerland’s Federal Office for Defense Procurement, IBM will operate the quantum computer, powered by its Quantum Nighthawk processor. The system will support research in areas such as chemistry, materials science, optimization and financial services, while giving Swiss businesses, startups and academic institutions access to its quantum computing technology. The company will also support quantum education through courses, certifications, workshops and hackathons.
IBM’s collaboration with Lockheed Martin will further explore quantum technologies for aerospace and defense applications. Two planned joint development projects will examine quantum sensing for navigation and improvements in additive manufacturing involving metallic alloys. These initiatives combine the company’s expertise in quantum computing and artificial intelligence (AI) with Lockheed Martin’s capabilities in quantum sensing and advanced manufacturing.
The venture also strengthens IBM’s long-standing relationship with ETH Zurich and supports a new 10-year effort to develop foundational algorithms for AI and quantum computing. These developments reflect the company’s ongoing efforts to advance quantum computing and AI technologies.
How Are Competitors Advancing in Quantum Computing?
IBM faces competition from Microsoft Corporation MSFT and Alphabet Inc. GOOGL. Microsoft is strengthening its quantum computing research through collaborations to explore new approaches to quantum technologies. The company is working to identify potential applications of quantum computing in areas such as chemistry, materials science and optimization. Microsoft is developing quantum technologies to solve complex problems that are difficult for traditional computers.
Alphabet is expanding its quantum computing research through Google Quantum AI, focusing on technologies that can improve quantum systems' performance. The company is exploring quantum computing applications in areas such as optimization, simulation and advanced scientific calculations. Alphabet is collaborating with universities and research organizations on quantum computing projects.
IBM’s Price Performance, Valuation & Estimates
IBM shares have lost 8.9% over the past year against the industry’s growth of 193.3%.
From a valuation standpoint, IBM trades at a forward price-to-sales ratio of 3.04, below the industry average of 4.72.
Earnings estimates for 2026 have declined 0.7% to $12.33 over the past 60 days, while the same for 2027 have decreased 1.9% to $13.22.
Image Source: Zacks Investment Research
IBM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Can IBM's Latest Innovation Hub Advance Quantum Computing Ecosystem?

IonQ IONQ has launched Superion 256, its sixth-generation quantum computing platform and the foundation for future compute products. The platform has moved from early design to trapping ions in under a year, with IonQ fabricating its first fully integrated 256-qubit quantum processing units (QPUs) at its SkyWater subsidiary. The company has also trapped the first ions in prototype Superion 256 systems, which are being built simultaneously at multiple U.S. facilities.
IonQ and SkyWater jointly designed and fabricated the chip, completing six tapeouts in the first half of 2026. Working with SkyWater’s quantum foundry, IonQ cut its design cycle to two months from nine months. The teams also delivered 12 times more wafer lots over six months than they did at a previous foundry.
At the core of Superion 256 is IonQ’s Electronic Qubit Control (“EQC”), which controls trapped-ion qubits with electronics integrated directly into the chip rather than with laser systems. The underlying qubit control is manufactured using standard semiconductor processes. The chip uses the same EQC technology that IonQ used to achieve a 99.99% two-qubit gate fidelity world record in October 2025.
Designed for data center deployment, the system fits a standard server rack without requiring a bespoke buildout. It also uses less power than a rack of GPUs, while its cooling system is suited to typical data center environments.
The Superion platform scales from 256 qubits to millions of qubits. Every generation that follows Superion 256 expands use of the same ions, the same qubits, the same electronic control and the same chip fabric. Superion 10K is already underway and integrates CMOS into the chip, a scaling technique SkyWater already manufactures at volume.
IonQ is taking orders for Superion 256 now, with customer deliveries set for 2027. The company pre-sold its first system in the first quarter of 2026, while production-grade systems will also run on its cloud.
IONQ’s Peer Updates
IBM IBM and Lockheed Martin, through an offset agreement with armasuisse, Switzerland’s Federal Office for Defence Procurement, have established a hub for quantum innovation at ETH Zurich, a public research university. The new hub plans to host the country’s first IBM Quantum System Two at the Swiss National Supercomputing Center in Lugano. The project also advances the strategic collaboration between the companies, combining Lockheed Martin innovations in quantum sensing and additive manufacturing with IBM’s expertise in quantum computing and AI.
Meanwhile, Arm Holdings plc ARM has introduced CSS for Mobile 2, combining agentic AI and AI-native graphics in a single compute platform. CSS for Mobile 2 includes the new Arm Mali G2-Ultra NX GPU, the Arm C2 CPU cluster with SME2, enhanced system IP, physical implementations and a developer-ready software ecosystem in a platform optimized for next-generation mobile devices.
The Zacks Rundown for IONQ Stock
Over the past year, IonQ shares have dropped 21.4% against the industry’s 97.9% surge.
IONQ is trading at a forward earnings multiple of 36.15X compared with the 4.93X industry average.
Estimates for the company’s loss per share have widened over the past three months, as shown below.
IONQ stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
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IonQ, Inc. (IONQ) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).

IonQ Advances Quantum Computing With Superion 256: What's Ahead?

For Immediate Release
Chicago, IL – September 11, 2026 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: D-Wave Quantum QBTS, Rigetti Computing RGTI, IBM IBM, Alphabet GOOGL and Amazon AMZN.
Here are highlights from Thursday’s Analyst Blog:
Hyperscalers Bet on AI & Quantum: Watch These Stocks in September
The AI buildout is no longer a future investment game. Hyperscalers are committing hundreds of billions of dollars to data centers, accelerators, networking and power infrastructure to meet surging demand for AI workloads. The scale is evident in Alphabet’s planned $195-$205 billion of 2026 capital spending, while Google Cloud revenues jumped 82% year over year in the second quarter of 2026.
Quantum computing is following a different path. Governments and corporations are increasing funding as the technology moves closer to practical applications, but commercial revenues remain far smaller and the investment timeline considerably longer. The U.S. government recently committed $300 million under the CHIPS and Science Act to D-Wave Quantum, Rigetti Computing and Quantinuum, with each company receiving $100 million in R&D funding in exchange for minority government stakes. Yet D-Wave and Rigetti remained more than 25% below their 2026 starting levels even after the announcement.
This divergence matters for investors in the rest of September. Rather than chasing volatile pure-play quantum stocks, investors can gain exposure to the longer-term quantum opportunity through established technology companies that are already generating substantial AI and cloud revenue. IBM, Alphabet and Amazon offer three different ways to participate in this convergence while relying on businesses with current commercial demand to support the investment case.
AI Infrastructure Has a Longer Runway
The scale of the AI buildout supports this approach. PwC estimates global data-center capital spending to reach $31.6 trillion through 2050, with annual spending rising from about $800 billion in 2026 to $1.8 trillion by 2050. The firm expects recurring server, GPU and other equipment upgrades to drive much of the long-term investment.
Per McKinsey, quantum-computing companies generated more than $1 billion of revenues in 2025, with potential to rise to $4.4 billion by 2028. More than 300 companies are already experimenting with quantum technology, but McKinsey also notes that the return on investment remains difficult to quantify because many applications are still experimental or hybrid.
This favors diversified technology leaders over pure-play quantum companies for the remainder of 2026.
3 Stocks to Watch in September
Alphabet: It offers a combination of hyperscaler economics, AI monetization and quantum optionality. Google Cloud revenues jumped 82% year over yearin the second quarter of 2026, while Cloud backlog reached $514 billion. Alphabet also raised its 2026 capital-spending guidance to $195-$205 billion, with AI infrastructure driving a significant portion of the investment.
Alphabet is also advancing its quantum-computing efforts. Google Quantum AI expanded its research into neutral-atom systems in 2026 and expects commercially relevant quantum computers to become available by the end of the decade. This gives GOOGL exposure to quantum computing without relying on near-term quantum revenues.
GOOGL is projected to report full-year 2026 earnings growth of 89.6% on revenue growth of 26%. The stock carries a Zacks Rank #3 (Hold).
Amazon: Its AI-led development is increasingly centered on AWS, where growth is accelerating as customers expand AI workloads. AWS sales surged 37% year over year in the second quarter, its fastest growth in 18 quarters, pushing the business to a $169 billion annualized revenue run rate. Amazon also said its AI business surpassed a $25 billion annual revenue run rate, growing at a triple-digit rate.
Amazon is expanding its AI infrastructure ecosystem through custom chips and recently entered a long-term partnership with Qualcomm under which it could purchase up to $60 billion of AI data-center chips and related products. The companies are also developing custom silicon and optical connectivity solutions for AI data centers, with the initial focus on AI inference. AWS also operates Amazon Braket, giving customers cloud access to multiple quantum-computing architectures.
AMZN is projected to report full-year 2026 earnings growth of 82.2% on revenue growth of 15.7%. The stock carries a Zacks Rank #2 (Buy).
IBM: It provides the strongest direct quantum exposure among the three while retaining a substantial enterprise AI and hybrid-cloud business. In the second quarter of 2026, software revenues increased 5% with Hybrid Cloud (Red Hat) revenues up 11% and Data revenues up 19%. IBM expects 2026 constant-currency revenue growth of 4%-5% and plans to invest more than $10 billion in quantum over the next five years.
IBM's quantum roadmap targets quantum advantage in 2026 and a large-scale fault-tolerant quantum computer by 2029. The company also announced a quantum innovation hub with Lockheed Martin in Switzerland this week, with an IBM Quantum System Two to be deployed at the Swiss National Supercomputing Centre. The initiative expands IBM's quantum ecosystem across research, government and industrial applications.
IBM is projected to report full-year 2026 earnings growth of 6.4% on revenue growth of 4.3%. The stock carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
This article originally published on Zacks Investment Research (zacks.com).

The Zacks Analyst Blog Highlights D-Wave Quantum, Rigetti, IBM, Alphabet and Amazon

The AI buildout is no longer a future investment game. Hyperscalers are committing hundreds of billions of dollars to data centers, accelerators, networking and power infrastructure to meet surging demand for AI workloads. The scale is evident in Alphabet’s planned $195-$205 billion of 2026 capital spending, while Google Cloud revenues jumped 82% year over year in the second quarter of 2026.
Quantum computing is following a different path. Governments and corporations are increasing funding as the technology moves closer to practical applications, but commercial revenues remain far smaller and the investment timeline considerably longer. The U.S. government recently committed $300 million under the CHIPS and Science Act to D-Wave Quantum QBTS, Rigetti Computing RGTI and Quantinuum, with each company receiving $100 million in R&D funding in exchange for minority government stakes. Yet D-Wave and Rigetti remained more than 25% below their 2026 starting levels even after the announcement.
This divergence matters for investors in the rest of September. Rather than chasing volatile pure-play quantum stocks, investors can gain exposure to the longer-term quantum opportunity through established technology companies that are already generating substantial AI and cloud revenue. IBM IBM, Alphabet GOOGL and Amazon AMZN offer three different ways to participate in this convergence while relying on businesses with current commercial demand to support the investment case.
AI Infrastructure Has a Longer Runway
The scale of the AI buildout supports this approach. PwC estimatesglobal data-center capital spending to reach $31.6 trillion through 2050, with annual spending rising from about $800 billion in 2026 to $1.8 trillion by 2050. The firm expects recurring server, GPU and other equipment upgrades to drive much of the long-term investment.
Per McKinsey, quantum-computing companies generated more than $1 billion of revenues in 2025, with potential to rise to $4.4 billion by 2028. More than 300 companies are already experimenting with quantum technology, but McKinsey also notes that the return on investment remains difficult to quantify because many applications are still experimental or hybrid.
This favors diversified technology leaders over pure-play quantum companies for the remainder of 2026.
3 Stocks to Watch in September
Alphabet: It offers a combination of hyperscaler economics, AI monetization and quantum optionality. Google Cloud revenues jumped 82% year over yearin the second quarter of 2026, while Cloud backlog reached $514 billion. Alphabet also raised its 2026 capital-spending guidance to $195-$205 billion, with AI infrastructure driving a significant portion of the investment.
Alphabet is also advancing its quantum-computing efforts. Google Quantum AI expanded its research into neutral-atom systems in 2026 and expects commercially relevant quantum computers to become available by the end of the decade. This gives GOOGL exposure to quantum computing without relying on near-term quantum revenues.
GOOGL is projected to report full-year 2026 earnings growth of 89.6% on revenue growth of 26%. The stock carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Amazon: Its AI-led development is increasingly centered on AWS, where growth is accelerating as customers expand AI workloads. AWS sales surged 37% year over year in the second quarter, its fastest growth in 18 quarters, pushing the business to a $169 billion annualized revenue run rate. Amazon also said its AI business surpassed a $25 billion annual revenue run rate, growing at a triple-digit rate.
Amazon is expanding its AI infrastructure ecosystem through custom chips and recently entered a long-term partnership with Qualcomm under which it could purchase up to $60 billion of AI data-center chips and related products. The companies are also developing custom silicon and optical connectivity solutions for AI data centers, with the initial focus on AI inference. AWS also operates Amazon Braket, giving customers cloud access to multiple quantum-computing architectures.
AMZN is projected to report full-year 2026 earnings growth of 82.2% on revenue growth of 15.7%. The stock carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
IBM: It provides the strongest direct quantum exposure among the three while retaining a substantial enterprise AI and hybrid-cloud business. In the second quarter of 2026, software revenues increased 5% with Hybrid Cloud (Red Hat) revenues up 11% and Data revenues up 19%. IBM expects 2026 constant-currency revenue growth of 4%-5% and plans to invest more than $10 billion in quantum over the next five years.
IBM's quantum roadmap targets quantum advantage in 2026 and a large-scale fault-tolerant quantum computer by 2029. The company also announced a quantum innovation hub with Lockheed Martin in Switzerland this week, with an IBM Quantum System Two to be deployed at the Swiss National Supercomputing Centre. The initiative expands IBM's quantum ecosystem across research, government and industrial applications.
IBM is projected to report full-year 2026 earnings growth of 6.4% on revenue growth of 4.3%. The stock carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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Hyperscalers Bet on AI & Quantum: Watch GOOGL, AMZN, IBM in September

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Shoe Station Group Inc (Symbol: SHOE), where a total volume of 10,742 contracts has been traded thus far today, a contract volume which is representative of approximately 1.1 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 137.6% of SHOE's average daily trading volume over the past month, of 780,585 shares. Especially high volume was seen for the $12.50 strike put option expiring October 16, 2026, with 7,613 contracts trading so far today, representing approximately 761,300 underlying shares of SHOE. Below is a chart showing SHOE's trailing twelve month trading history, with the $12.50 strike highlighted in orange:
Ally Financial Inc (Symbol: ALLY) options are showing a volume of 31,495 contracts thus far today. That number of contracts represents approximately 3.1 million underlying shares, working out to a sizeable 114.7% of ALLY's average daily trading volume over the past month, of 2.7 million shares. Especially high volume was seen for the $45 strike call option expiring September 18, 2026, with 5,767 contracts trading so far today, representing approximately 576,700 underlying shares of ALLY. Below is a chart showing ALLY's trailing twelve month trading history, with the $45 strike highlighted in orange:
And International Business Machines Corp (Symbol: IBM) saw options trading volume of 51,274 contracts, representing approximately 5.1 million underlying shares or approximately 108.4% of IBM's average daily trading volume over the past month, of 4.7 million shares. Especially high volume was seen for the $250 strike call option expiring September 11, 2026, with 4,939 contracts trading so far today, representing approximately 493,900 underlying shares of IBM. Below is a chart showing IBM's trailing twelve month trading history, with the $250 strike highlighted in orange:
For the various different available expirations for SHOE options, ALLY options, or IBM options, visit StockOptionsChannel.com.
Further SHOE Research:

Noteworthy Wednesday Option Activity: SHOE, ALLY, IBM

Quantum Corporation QMCO strengthened its financial position after eliminating all outstanding debt in the first quarter of fiscal 2027. As of June 30, 2026, the company had no term debt or convertible notes outstanding compared with $54.8 million of term debt and $90 million of convertible notes on its balance sheet at the end of fiscal 2026.
The company eliminated the term debt through proceeds from a private placement. The company raised approximately $94.6 million in net proceeds by issuing roughly 10.6 million common shares. Quantum subsequently paid $57.8 million in aggregate for the termination of the Term Loan Credit Agreement. The sum included the outstanding principal amount, accrued interest and fees and expenses incurred in connection with the termination.
The convertible notes were converted into common shares and subsequently canceled, leaving the company without outstanding term-loan or convertible-note debt.
The debt elimination will reduce Quantum’s interest expenses. Management noted that it expects interest expense to be “minimal” going forward following the debt elimination. It had $21.6 million of interest expense in fiscal 2026. For the fiscal first quarter, interest expense declined to $2.1 million from $6.5 million in the year-ago period.
Quantum Corporation Revenue (Quarterly)
Quantum had $54.6 million in cash, cash equivalents, and restricted cash at the quarter-end. The company also delivered a cash flow from operating activities of $0.9 million compared with a $16.9 million outflow a year earlier. Quarterly revenues reached $80.8 million, up 25.7% year over year, driven by strong demand for ActiveScale and tape storage solutions.
With debt eliminated and improving operating performance, QMCO appears better positioned to fund growth initiatives and navigate ongoing supply constraints while pursuing sustainable profitability. However, the company needs to watch out for stiff competition from players such as International Business Machines IBM, EMC business unit of Dell and NetApp NTAP.
Mapping the Competitive Terrain
IBM and Quantum face off each other in the enterprise storage market, including object storage systems and tape storage systems. On the lastearnings call management highlighted that the company is gaining share in storage through its Flash, Fusion and tape offerings, including AI-powered capabilities that help clients scale and manage data for AI.
However, the company’s balance sheet has become more complex owing to its acquisition-led transformation. Total debt was $62 billion at the end of the second quarter of 2026, while cash, restricted cash and marketable securities fell to $8.2 billion from $14.5 billion at 2025-end.
NetApp is positioning its platform around AI-ready data infrastructure, providing unified storage, agile security and a single control plane across hybrid multi-cloud environments. For the first quarter of fiscal 2027, All-flash array revenues came in at $1.31 billion, up 47% from the prior-year quarter. NetApp won approximately 350 AI and data lake modernization deals, with management noting larger deal sizes as customers moved from proof of concept to production.
Coming to the balance sheet, NTAP ended the quarter with $3.6 billion in cash, cash equivalents and investments and $2.5 billion in gross debt, leaving net cash of $1.1 billion.
QMCO Price Performance, Valuation and Estimates
Shares of the company have surged 107.6% in the past month compared with the Zacks Computer- Storage Devices industry's rise of 22%.
QMCO seems attractive, as suggested by the Value Score of A. QMCO’s shares are trading at a forward 12-month price/sales ratio of 2.63, lower than the industry’s 3.3.
The Zacks Consensus Estimate for QMCO’s earnings for fiscal 2027 has been revised upward over the past 60 days.
Image Source: Zacks Investment Research
Quantum currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NetApp, Inc. (NTAP) : Free Stock Analysis Report

Does Quantum's Debt Elimination Strengthen Its Financial Position?

Arista Networks, Inc. ANET and International Business Machines Corporation IBM are leading players in the enterprise IT infrastructure and are benefiting from the rise of AI (artificial intelligence) and cloud computing. Arista offers one of the broadest product lines of data center and campus Ethernet switches and routers in the industry. It provides routing and switching platforms with industry-leading capacity, low latency, port density and power efficiency.
IBM offers cloud and data solutions that aid enterprises in digital transformation. In addition to hybrid cloud services, the company provides advanced information technology solutions, computer systems, quantum computing and supercomputing solutions, enterprise software, storage systems and microelectronics.
With a focus on hybrid cloud and AI, both IBM and Arista are strategically positioned in the cloud infrastructure market, with overlapping presence in networking infrastructure, enterprise IT solutions and cloud/data-center ecosystems. Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in the industry.
The Case for ANET
Arista holds a leadership position in 100-gigabit Ethernet switches and is increasingly gaining market traction in 200- and 400-gigabit high-performance switching products. It is witnessing solid demand trends among enterprise customers backed by its multi-domain modern software approach, which is built upon its unique and differentiating foundation, the single EOS (Extensible Operating System) and CloudVision stack. Arista has made several additions to its multi-cloud and cloud-native software product family with CloudEOS Edge. It has introduced new cognitive Wi-Fi software that delivers intelligent application identification, automated troubleshooting and location services. The versatility of Arista’s unified software stack across various use cases, including WAN routing, campus and data center infrastructure, sets it apart from other competitors in the industry.
In addition to high capacity and easy availability, its cloud networking solutions promise predictable performance and programmability, enabling integration with third-party applications for network management, automation and orchestration. The company boasts a comprehensive portfolio with the right network architecture for client-to-campus data center cloud and AI networking, backed by three guiding principles. These include best-in-class, highly proactive products with resilience and zero-touch automation, with predictive client-to-cloud one-click operations with granular visibility and prescriptive insights for deeper AI algorithms. Arista is likely to benefit from its software-driven, data-centric approach, which helps customers build their cloud architecture and enhance the cloud experience they offer their clients.
However, Arista remains plagued by high operating costs. Total operating expenses in the second quarter of 2026 increased around 17.7% to $532.3 million, owing to higher headcount, new product introduction costs and higher variable compensation expenditures. Moreover, the redesign of products and their supply chain mechanism have eroded margins. Research & development costs rose to $348.2 million from $296.5 million. Lingering supply bottlenecks for advanced products, a concentrated customer base and stiff competition from other networking & cloud native infrastructure vendors are other headwinds for ANET.
The Case for IBM
IBM is poised to benefit from healthy demand trends for hybrid cloud and AI, which drive the Software and Consulting segments. The company’s growth is expected to be aided by analytics, cloud computing and security in the long term. With a surge in traditional cloud-native workloads and associated applications, along with a rise in generative AI deployment, there is a radical expansion in the number of cloud workloads that enterprises are currently managing. This has resulted in heterogeneous, dynamic and complex infrastructure strategies, which have led firms to undertake a cloud-agnostic and interoperable approach to highly secure multi-cloud management, translating into a healthy demand for IBM hybrid cloud solutions.
In addition, the buyout of HashiCorp has significantly augmented IBM’s capabilities to assist enterprises in managing complex cloud environments. HashiCorp’s toolsets complement IBM Red Hat’s portfolio, bringing additional functionalities for cloud infrastructure management and bolstering its hybrid multi-cloud approach.
Despite solid hybrid cloud and AI traction, IBM is facing stiff competition from Amazon.com, Inc.’s AMZN AWS and Microsoft Corporation’s MSFT Azure. Increasing pricing pressure is eroding margins, and profitability has trended down over the years, barring occasional spikes. The company faces a potent threat from AI firm Anthropic as the latter’s Claude Code tool can modernize legacy COBOL systems — a foundational programming language deeply embedded in IBM’s mainframe ecosystem. With Claude Code proposing to substantially automate code exploration, documentation, refactoring and security analysis, it threatened to reduce enterprises’ reliance on specialized legacy service providers like IBM, putting its sustenance at stake.
How Do Zacks Estimates Compare for ANET & IBM?
The Zacks Consensus Estimate for Arista’s 2026 sales and EPS implies year-over-year growth of 39.1% and 35.6%, respectively. The EPS estimates have trended up 11.3% over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for IBM’s 2026 sales and EPS indicates year-over-year growth of 4.3% and 6.4%, respectively. The EPS estimates have declined 0.7% over the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of IBM & ANET
Over the past year, IBM has plummeted 9.7% against the industry’s growth of 196.1%. ANET has surged 29.4% over the same period.
Image Source: Zacks Investment Research
IBM looks more attractive than Arista from a valuation standpoint. Going by the price/earnings ratio, IBM’s shares currently trade at 17.93 forward earnings, significantly lower than Arista’s 41.49.
Image Source: Zacks Investment Research
ANET or IBM: Which is the Better Pick?
Arista currently carries a Zacks Rank #2 (Buy), while IBM has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Both companies expect their sales and profits to improve in 2026. Arista has better price performance and better estimate revisions compared with IBM, although it is a bit expensive in terms of the valuation metric. Arista has shown steady revenue and EPS growth for years, while IBM has been facing a bumpy road.
Investors looking for the "next wave" in AI and cloud infrastructure may lean toward Arista, while those seeking a broad, resilient tech play may favor IBM. However, with a better Zacks Rank and emerging growth opportunities in AI and cloud infrastructure, Arista seems to have an edge over IBM and appears to be a better investment option at the moment.
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Arista vs. IBM: Which Cloud AI Stock Should Investors Buy Now?

Key Points
Arista Networks currently looks more stable in this comparison; it continuously adds to its top line while International Business Machines displays fluctuating results without establishing a steady upward trajectory.
Over the duration of the past eight periods, Arista Networks recorded continuous quarter-over-quarter increases without fail, whereas IBM displayed a highly cyclical quarter-over-quarter pattern characterized by periodic drops and subsequent recoveries.
Investors evaluating the two companies should carefully watch whether this wide gap in relative stability continues to persist or if changing dynamics eventually cause their respective revenue trajectories to converge in upcoming financial cycles.
Arista Networks: Steady and Reliable Quarterly Revenue Expansion
Arista Networks (NYSE:ANET) primarily generates its operating income by designing advanced cloud networking solutions, delivering specialized high-performance switching hardware, and providing extensive post-contract technical support to major internet companies and global financial services organizations.
While launching new hardware platforms for data centers and simultaneously expanding its enterprise security portfolio during the summer of 2026, it reported a 45% operating margin for the quarter ended June 30, 2026.
International Business Machines: Highly Volatile and Cyclical Revenue Patterns
International Business Machines (NYSE:IBM) earns a majority of its incoming cash by supplying complex hybrid cloud software ecosystems, developing enterprise server infrastructure, and delivering specialized business transformation consulting services to clients across the globe.
It faced multiple securities fraud investigations regarding its public business deal outlook and completed the acquisition of HRL Laboratories in the summer of 2026 to advance its work in quantum computing. It generated a 15% operating margin for the quarter ended June 30, 2026.
Why Tracking Revenue Matters for Investors
Revenue assists everyday investors understand whether a business is successfully attracting new clients and expanding its broader operational footprint. It serves as a starting point to help investors understand the total amount of money a business brings in before deducting any operational expenses.
Comparing Quarterly Revenue for Arista Networks and International Business Machines
Calendar quarter
Arista Networks Revenue
International Business Machines Revenue
Q3 2024
$1.8 billion (quarter ended Sept. 30, 2024)
$15.0 billion (quarter ended Sept. 30, 2024)
Q4 2024
$1.9 billion (quarter ended Dec. 31, 2024)
$17.6 billion (quarter ended Dec. 31, 2024)
Q1 2025
$2.0 billion (quarter ended March 31, 2025)
$14.5 billion (quarter ended March 31, 2025)
Q2 2025
$2.2 billion (quarter ended June 30, 2025)
$17.0 billion (quarter ended June 30, 2025)
Q3 2025
$2.3 billion (quarter ended Sept. 30, 2025)
$16.3 billion (quarter ended Sept. 30, 2025)
Q4 2025
$2.5 billion (quarter ended Dec. 31, 2025)
$19.7 billion (quarter ended Dec. 31, 2025)
Q1 2026
$2.7 billion (quarter ended March 31, 2026)
$15.9 billion (quarter ended March 31, 2026)
Q2 2026
$3.0 billion (quarter ended June 30, 2026)
$17.2 billion (quarter ended June 30, 2026)
Data source: Company filings. Data as of Sept. 4, 2026.
Foolish Take
The revenue trends for Arista Networks and IBM tell a starkly different story about the trajectories of these businesses benefiting from the massive artificial intelligence tailwind. The former has the advantage as companies rush to build out the data center computing infrastructure required to operate AI systems. This has allowed Arista to experience consistent upward sales growth every quarter, and the trend is poised to continue in Q3, with the company forecasting revenue to hit $3.3 billion.
Meanwhile, IBM has exhibited quarterly revenue volatility. This is a result of its business model, due to a mix of software, hardware, and consulting services. Big Blue's infrastructure segment, which sells mainframes, follows an upgrade cycle, and that division saw a 7% year-over-year Q2 sales decline, suggesting customer upgrades are complete for now. Also, Q2 revenue in its consulting division was flat year over year, as this area is highly variable in terms of customer spending.
IBM cut its 2026 full-year sales forecast as customers shifted spending toward businesses such as Arista, prioritizing AI data center buildouts amid concerns of supply shortages. Its HRL Laboratories acquisition points to the company betting on quantum computers to galvanize future growth. This segment of its business holds the promise of revolutionizing the computing industry.
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Arista Networks vs. IBM: Comparing Quarterly Revenue Trends Between These Artificial Intelligence Giants

Silicon Motion Technology Corporation SIMO has gained a stellar 186.1% over the past year compared with the industry’s growth of 195.5%. It has outperformed peers like International Business Machines Corporation IBM but lagged Advanced Micro Devices, Inc. AMD. While IBM is down 5.6%, Advanced Micro has soared 201.4% over this period.
One-Year SIMO Stock Price Performance
Image Source: Zacks Investment Research
Portfolio Strength: SIMO’s Competitive Advantage
Silicon Motion is benefiting from its strong position in the NAND flash controller market, expanding customer engagements and continued product innovation. The company is a leading merchant supplier of client SSD controllers to module makers, serving major customers across the United States, Taiwan and China.
Its close collaboration with NAND flash manufacturers is a key strength. Silicon Motion has developed proprietary controller technologies to improve the performance, reliability and power efficiency of advanced 3D NAND solutions. Growing adoption of these controllers, coupled with continued expansion in 3D NAND capacity, should support SSD controller revenues.
The company is also witnessing solid momentum in PCIe NVMe client SSD controllers. Its SM2508 PCIe Gen5 client SSD controller, built on TSMC’s 6-nanometer EUV process, offers significantly improved power efficiency and performance over earlier-generation solutions. Increasing adoption of PCIe Gen5 across PCs and other high-performance computing applications is expected to create incremental growth opportunities.
Silicon Motion is also expanding its footprint beyond traditional client SSDs. The company continues to broaden engagements with PC OEMs while strengthening its eMMC and UFS controller portfolio for smartphones, automotive applications and IoT devices. The upcoming launch of next-generation enterprise SSD controllers should further widen its addressable market and increase exposure to higher-value storage applications.
An improving demand for eMMC products is supporting the embedded storage business. The continued transition toward newer eMMC standards, including eMMC 5.1, will likely provide additional opportunities for controller sales.
Fabless Business Model: SIMO’s X-Factor
Silicon Motion’s fabless business model offers a key advantage. By focusing on semiconductor design while outsourcing production to foundry partners such as TSMC, the company can limit capital expenditure requirements and quickly adopt advanced process technologies.
This asset-light structure allows Silicon Motion to devote greater resources to research and development while maintaining operating flexibility. Access to leading-edge manufacturing nodes also helps improve performance, power efficiency and product economics, strengthening the company’s competitive position.
Silicon Motion appears well-positioned to capitalize on rising storage demand across AI, high-performance computing, cloud data centers, automotive systems, smartphones and connected devices. Its expanding customer base, diversified product portfolio and continued innovation remain key catalysts for top-line growth.
The company’s scale further reinforces its market position. Silicon Motion has shipped more than 5 billion controllers cumulatively over the past decade and averages more than 750 million NAND controller shipments annually. This broad installed base and extensive industry experience should help the company benefit from the long-term growth in global data generation and storage requirements.
Estimate Revision Trend
Earnings estimates for Silicon Motion for 2026 have moved up 134.9% to $11.16 over the past year, while the same for 2027 has increased 187.2% to $16.34. The positive estimate revision depicts bullish sentiment about the stock’s growth potential.
End Note
With solid fundamentals and healthy revenue-generating potential, driven by robust demand trends, Silicon Motion appears to be a solid investment proposition. Further, a strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers. An asset-light fabless semiconductor model, solid growth exposure to AI, cloud and automotive markets, with increasing market share in SSD and mobile controllers and continuous innovation in storage technologies are key growth drivers for the company.
The stock has a long-term earnings growth expectation of 53.6% and delivered a trailing four-quarter average earnings surprise of 14%. Silicon Motion sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Riding on a robust earnings surprise history and favorable Zacks Rank, Silicon Motion appears primed for further stock price appreciation. Consequently, investors are likely to profit if they bet on this high-flying stock now.
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International Business Machines Corporation

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