IBM’s Valuation is Getting Interesting as AI and Consulting Rebound

International Business Machines Corporation (NYSE:IBM) isn’t a typical growth stock. Investors won’t buy IBM because they expect its revenue to suddenly start growing 20% a year. The appeal is elsewhere. IBM has a large software business, recurring revenue, consulting operations, exposure to AI, and a long track record of generating cash. That combination makes its valuation worth looking at more closely.

IBM shares closed at $221.29 on October 6, 2026. At that price, the stock trades at about 19.7 times trailing earnings and 17.3 times forward earnings. The company also pays $6.76 a year in dividends, giving the stock a yield of roughly 3.1%. For a mature technology company, that’s not an obviously cheap valuation. But it’s also not particularly demanding if IBM can keep growing earnings at a high-single-digit pace.

The Latest Numbers Tell a Mixed Story