About the Company

International Business Machine, known by its acronym IBM, was dedicated to providing software and hardware technology. In the early 1980s, it brought a revolutionary computer to the market, introducing the world's fastest computer before the new millennium. Since 2011, it has shifted its focus to the world of artificial intelligence and cloud solutions. It offers consulting services to its clients, providing AI and hybrid cloud-based software and infrastructure. It currently focuses on AI enhancement and quantum computing across 19 research facilities in 12 labs across the globe, employing over 300k employees.[1]

Billions in quantum computing

IBM's interest in quantum computing is evidenced by its decision to invest at least $30 billion in the US to expand the development and production of quantum computers, including mainframes – computers that are used for mission-critical applications that need to process massive amounts of data. The investment, which the company announced on 28 April 2025, is part of a $150 billion financing package it plans to use over the next 5 years to boost the US economy. It expects its plans to help improve the competitiveness and national security of the United States, along with changes in employment. IBM also aims to become a leader in the quantum industry in the shortest possible time, which its CEO, Arvind Krishna, has described as the definition of the future. It is also important to add that according to IBM itself, it already has the largest number of quantum systems in the world.[2]

Competition is fierce

Several companies are interested in being the first to develop quantum technology that can solve tasks in minutes that would take billions of years for conventional commercial computers. Among them are tech giants Microsoft, Amazon, Alphabet and Nvidia. The first three of these have unveiled their own quantum chips - Majorana 1 (Microsoft)[3], Ocelot (Amazon)[4] and Willow (Alphabet). Alphabet's semiconductor can reduce expected errors, the one from Amazon helps reduce the cost of integrating quantum error correction by almost 90%, while Majorana offers a topological superconductor architecture that helps solve the most complex tasks. Meanwhile, Nvidia is building a research centre in Boston, US, where it will combine quantum hardware with AI[5] supercomputers, plus investing $500 billion across the US to support supercomputer manufacturing and AI development.[6]

Results exceeded expectations

Judging by its economic results, IBM's business to date has paid off, and moreover, has exceeded market expectations. For the first quarter of 2025, the company managed to achieve revenues of $14.5 billion, up 1% year-on-year, with the software segment driving the growth with a 7% increase in revenues. According to CNBC, total revenue was expected to reach USD 14.4 billion. Earnings per share followed the same scenario, reaching USD 1.6, which was USD 0.2 higher than the estimate. Net income, on the other hand, dropped to USD 1.06 billion compared to last year when it was at USD 1.61 billion. The remaining segments saw a decline, but their results were still higher than analysts' expectations. For the consulting segment, sales were $5.07 billion (expected to be $5.05 billion) and the infrastructure segment, which includes mainframes, added $2.89 billion to sales (expected to be $2.76 billion).

Looking into the current second quarter, IBM expects its sales to grow to 16.4 billion to 16.75 billion, which, at the mid-range, would be more than expected. Krishna assured investors that their success lies in their hybrid cloud and AI strategies, which is reflected in their performance, while their customers' needs continue to be at the forefront. [7] [8]

The stock has outperformed its competitors

Meanwhile, the software giant has also done well in the stock market this year. Since the beginning of the year, its stock has risen more than 7% to $236.16 (the level as of April 29, 2025). More significant declines were recorded by the company in early April 2025 following the announcement of across-the-board tariffs and on 23 April 2025 following the publication of the aforementioned economic results, which were caused by the announcement of the suspension of 15 collaborations with the US government as part of the Trump administration's investigation. Despite this, IBM fared much better than the aforementioned competitors. Over the past year, the company's share price has risen by 41%, and looking at 5-year performance, this is an increase of more than 102%.*

IBM's share price performance over the last 5 years. (Source: Google Finance)*

Conclusion

IBM's investment is not just an ambition to accelerate work in many areas, but a strategic move that can also affect the value of the company. In the context of competition, it is also a signal that the company wants to strengthen its position in a rapidly changing technology environment. However, the risks should not be forgotten, as this is still a new technology that requires, among other things, high expenditure.

* Past performance is no guarantee of future results.

[1] https://www.ibm.com/about?lnk=flatitem

[2] https://newsroom.ibm.com/2025-04-28-ibm-unveils-150-billion-investment-in-america-to-accelerate-technology-opportunity

[3] https://news.microsoft.com/source/features/innovation/microsofts-majorana-1-chip-carves-new-path-for-quantum-computing/

[4] https://www.aboutamazon.com/news/aws/quantum-computing-aws-ocelot-chip

[5] https://nvidianews.nvidia.com/news/nvidia-to-build-accelerated-quantum-computing-research-center

[6] https://www.cnbc.com/2025/04/14/nvidia-to-mass-produce-ai-supercomputers-in-texas.html

[7] https://newsroom.ibm.com/2025-04-23-ibm-releases-first-quarter-results

[8] https://www.cnbc.com/2025/04/23/ibm-q1-earnings-report-2025.html