Shares plunged 13% in their biggest one-day drop since 2000, driving clear selling pressure ahead of IBM’s April 22 quarterly update. Major analysts cut price targets from $340 to $290 while retaining buy ratings.

Signings topped $18 billion (48% constant-currency growth) with Q4 consult signings up 37%, fueling broad-based momentum across managed services and consulting. Fiscal ’25 revenue reached $15.1 billion, adjusted EBITDA margin expanded 200 bps and pretax margin 220 bps. Outlook calls for 1% constant-currency revenue growth, an 18% adjusted EBITDA margin and at least $725 million adjusted pretax income, while management also targets more than 5% revenue growth and an additional $1 billion in free cash flow for FY 2026.

Iran’s IRGC has declared 18 U.S. tech firms, including IBM, as legitimate targets in the Middle East, while U.S. authorities imposed a $17 million DOJ settlement on IBM over federal contracting compliance. South Africa’s communications regulator is aligning licensing rules with B-BBEE’s Equity Equivalent Investment Programmes used by multinationals, and FedRAMP authorizations are accelerating IBM’s federal software deployments. Quantum and cybersecurity roadmaps are being driven by NIST’s 2035 PQC deadline and new multinational patent-sharing frameworks for AI models.

AI-driven narratives and buy-side endorsements have bolstered optimism in IBM’s long-term upside, with many investors viewing the stock as materially undervalued and anticipating steady cash-flow growth, yet this enthusiasm is tempered by concerns over premium multiples versus peers, downward earnings revisions, and risks from legacy competition and macro headwinds.