WATCHLIST / OUTSIDE PORTFOLIO · Models + cloud

IBM

International Business Machines Corporation

0%current portfolio weight

Latest available close$229.55-3.4% · vs previous close

DAILY CLOSE · USD2026-09-18Yahoo Finance ↗

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Explore a date

Daily candles, not a live feed. Price series is split-adjusted; total-return mode uses provider-adjusted prices including distributions. The chart does not predict returns.

A great business. At what price?

Test earnings growth against a change in valuation. All multiples below are your assumptions — not current company fundamentals.

Illustrative price CAGR—

CAGR = (1 + EPS growth) × (exit P/E ÷ entry P/E)^(1/years) − 1. Excludes dividends, dilution beyond EPS, taxes and fees. Not a price target. Not suitable for gold, bonds or companies with negative earnings.

RESEARCH ENGINE / 1.2

What must this price deliver?

Inspect reported numbers, test your assumptions and follow the next filing. A calculation is not an approved investment case.

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NORMALIZATION / v1.0.0

Normalization workpaper

A company-specific protocol, not an approved normalized cash flow.

Reported proxy available · normalization pending

Model familySum-of-parts segment DCF

OCF − cash capex / diluted share12.76 USD

Price / reported cash proxy17.99×

Required adjustment tests

contract quality
Convert backlog/RPO into dated probability-weighted cash; never count face value as equity.
working capital
Normalize working-capital timing; customer advances are not recurring profit.
acquisitions
Build a pro-forma organic base and include the full capital paid for acquisitions.
net debt
Reconcile debt, cash, preferred claims and acquisition funding exactly once.
sbc
Measure dilution and treat share compensation consistently with per-share cash.
capex split
Separate maintenance/replacement capex from expansion capex; do not assume either number.

Reported financial base

Annual period: 2025-01-01 → 2025-12-31Filed: 2026-02-24Reporting currency: USDLast source retrieval: 2026-09-18T22:00:49.022Z

Unreviewed extraction

Reported financial base
Metric	Value	Unit	Source
Revenue	67,535,000,000	USD	us-gaap:Revenues ↗
Operating income	—	—	Missing / manual review
Net income	10,593,000,000	USD	us-gaap:NetIncomeLoss ↗
Operating cash flow	13,193,000,000	USD	us-gaap:NetCashProvidedByUsedInOperatingActivities ↗
Cash capital expenditure	1,091,000,000	USD	us-gaap:PaymentsToAcquirePropertyPlantAndEquipment ↗
Share-based compensation	1,715,000,000	USD	us-gaap:ShareBasedCompensation ↗
Weighted diluted shares	948,675,228	shares	us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding ↗
Cash and equivalents	13,587,000,000	USD	us-gaap:CashAndCashEquivalentsAtCarryingValue ↗
Current long-term debt	—	—	Missing / manual review
Noncurrent long-term debt	54,836,000,000	USD	us-gaap:LongTermDebtNoncurrent ↗

OCF − cash capex (not normalized)12,102,000,000 USDNormalized owner cash: not approved

Annual figures, not trailing twelve months. No automatic currency/ADR conversion. Cash proxy excludes review of leases, debt service, SBC, acquisitions and cycle. Missing values are not zero.

Company-specific method

Segment sum-of-parts DCF. Separate recurring software economics, implementation services, infrastructure-cycle exposure, acquisitions and net debt; do not capitalize bookings or partnership counts as cash.

Your scenario · not our forecast

Equity-per-share DCF: do not subtract net debt again. Future dilution must already be included in cash-per-share growth. This does not measure analyst consensus. Replacement capex and sustainable terminal cash still require review.

What changed?

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FUNDAMENTAL RESEARCH · 2026-09-06

The investment case, under examination.

A dated research map, not completed valuations. The 25-company portfolio baseline is unchanged; IBM is monitored at 0% outside it. Public facts do not establish an edge: every hypothesis still needs normalized financials, price-implied expectations and independent forward tests.

Watchlist candidate · outside portfolio · 0%

Research trigger / Q2 2026 context · Published 2026-08-13 · Source checked 2026-09-06

01 / What the issuer reported: IBM and OpenAI announced a joint enterprise go-to-market motion: GPT-5.6, Codex and ChatGPT Work are being embedded into IBM Consulting Advantage, with a dedicated OpenAI practice and forward-deployed teams.
02 / Our hypothesis — not established alpha: IBM may become a trusted integration and governance tollbooth between frontier models and regulated legacy workflows. This is a distribution hypothesis, not evidence that IBM owns a frontier model or has created AGI.
03 / What to measure next: Convert AI “book of business” into recurring Software/Red Hat/watsonx revenue, Consulting productivity and segment margin; track paid deployments, cash conversion, diluted shares, net debt and the utilization economics of third-party AI infrastructure.
04 / What would challenge the thesis: Challenge the thesis if partnership announcements multiply while comparable Software/Consulting margins and cash per diluted share fail to improve, or if model and compute suppliers capture most of the economics.
05 / Appropriate valuation method: Segment sum-of-parts DCF. Separate recurring software economics, implementation services, infrastructure-cycle exposure, acquisitions and net debt; do not capitalize bookings or partnership counts as cash.
06 / Still missing: Missing: reproducible bridge from AI bookings to segment revenue, margin and free cash flow per share; workload-level retention, utilization and third-party model/compute costs; price-implied expectations.

No measured consensus gap or approved price target. A familiar good business can still be an expensive stock.

Read the primary source ↗

Issuer-reported figures, not an independent accounting audit. Review after the next report or material filing. These review triggers are proposed, not automatic sell rules. Weights and paper mandates are unchanged.

Why this position exists

Enterprise AI deployment bridge — under examination

IBM could become a trusted integration and governance tollbooth between frontier models and regulated legacy workflows. The OpenAI and open-source infrastructure partnerships make that testable, but do not make IBM a frontier-model owner or prove AGI exposure.

Principal risk

IBM may remain a lower-margin implementer while model and compute suppliers capture most economics. Mature segments, acquisitions and debt can obscure whether AI creates incremental cash per diluted share.

What the daily radar monitors

01AI bookings → recurring Software / Red Hat / watsonx revenue and marginPRIMARY KPI

02Paid deployments, Consulting productivity, revenue growth and segment marginTREND + GUIDANCE

03Infrastructure utilization and third-party AI costs; FCF/share, dilution and net debtTHESIS TRIGGER

Decision rule

A headline never changes a weight by itself. The system verifies the primary source, tests the KPI trend and creates a proposal for the investment committee.