International Business Machines

International Business Machines Corporation provides integrated solutions and services worldwide. The company operates through four business segments: Software, Consulting, Infrastructure, and Financing. The Software segment offers hybrid cloud platform and software solutions, such as Red Hat, an enterprise open-source solutions; software for business automation, AIOps and management, integration, and application servers; data and artificial intelligence solutions; and security software and services for threat, data, and identity. This segment also provides transaction processing software that supports clients' mission-critical and on-premise workloads in banking, airlines, and retail industries. The Consulting segment offers business transformation services, including strategy, business process design and operations, data and analytics, and system integration services; technology consulting services; and application and cloud platform services. The Infrastructure segment provides on-premises and cloud-based server and storage solutions for its clients' mission-critical and regulated workloads; and support services and solutions for hybrid cloud infrastructure, as well as remanufacturing and remarketing services for used equipment. The Financing segment offers lease, installment payment, loan financing, and short-term working capital financing services. 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.

Executive Summary

IBM has orchestrated one of the most successful turnarounds in large-cap tech. By divesting low-margin managed services (Kyndryl) and doubling down on Hybrid Cloud (Red Hat) and Enterprise AI (watsonX), IBM has positioned itself as the "adult in the room" for enterprise GenAI adoption.

Unlike consumer-facing AI hype, IBM's Granite models focus on code generation, legal compliance, and low-latency enterprise tasks—solving the "last mile" problem for Fortune 500 deployment.

Recent Intelligence: The "Granite" Edge

[!NOTE] Source: Granite Model: Enterprise AI (Jan 2026)

IBM's open-source Granite models are differentiating through specificity. While GPT-4 pursues general reasoning, Granite targets:

Code Modernization: COBOL-to-Java translation (massive TAM in banking/legacy).
Legal & HR Compliance: Audit-ready outputs with indemnification.
Cost Efficiency: Smaller parameters (13B-34B) running on-prem or hybrid, undercutting token costs of massive models.

Management Assessment: Arvind Krishna

[!NOTE] Source: Arvind Krishna: Leadership Assessment (Jan 2026)

CEO Arvind Krishna (ex-Cloud/Cognitive Software) has instilled a "product-first" culture. His capital allocation strategy is disciplined:

M&A: Bolt-on software acquisitions (HashiCorp, Apptio) to strengthen the hybrid fabric.

Moat Source	Strength	Description
Switching Costs	Wide	Mission-critical mainframe (Z-Series) and Red Hat OpenShift fabric lock in Fortune 500 infrastructure. Moving off is technically perilous.
Intangible Assets	High	"Nobody gets fired for buying IBM." Deep trust in regulated industries (Gov, Banking, Healthcare) where data privacy is paramount.
Network Effect	Medium	Growing ecosystem around Red Hat and now the AI Alliance (open source vs closed models).

Year	Revenue	Net Income	Gross Profit	Op. Cash Flow
2024	$62.75B	$6.02B	$35.55B	$13.45B
2023	$61.86B	$7.50B	$34.30B	$13.93B
2022	$60.53B	$1.64B	$32.69B	$10.44B
2021	$57.35B	$5.74B	$31.49B	$12.80B

International Business Machines

Executive Summary

Recent Intelligence: The "Granite" Edge

Management Assessment: Arvind Krishna

1. Financial Health Check

2. Competitive Advantage (Moat)

3. Historical Performance

4. Valuation Framework

5. Risks

6. Investment Checklist

IBM Valuation Model

Strategic Assets

WatsonX Deep Dive: International Business Machines Corporation vs Azure OpenAI & Competition

IBM Midas Score Card: Quantitative Investment Analysis

Investment Idea: International Business Machines Corporation (IBM)

IBM Q4 2025 Earnings: AI Revenue Surge Analysis

Diagnostic Test

Arvind Krishna: Leadership Assessment at International Business Machines Corporation

IBM report

IBM report

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