Despite IBM’s 20% gain in its Cloud & Cognitive Software segment over the past year, Microsoft’s Intelligent Cloud arm has outpaced the company with revenue growth of 18% in fiscal 2025 compared with IBM’s 5% gain. Analysts at Morgan Stanley project Microsoft’s cloud and AI revenues to grow at a compound annual rate of 12% through 2027 versus IBM’s expected 4%, driven by stronger enterprise adoption of Azure AI services. IBM’s valuation remains more attractive—trading at a forward P/E of 18 compared with Microsoft’s 30—but investors are closely watching IBM’s ability to convert its R&D spending into higher-margin AI offerings.

IBM will host its fourth-quarter 2025 earnings conference call on Wednesday, January 28, 2026 at 5:00 p.m. ET. The live webcast will be accessible via the IBM investor relations site, where the company will release detailed segment results, including performance in Cloud & Cognitive Software, Global Business Services, and Systems. Management has indicated they will provide updated guidance for fiscal 2026, highlighting margin targets and expected free cash flow conversion of approximately 90%. A replay of the webcast, along with accompanying slides and prepared remarks, will be made available afterward.

IBM has extended its collaboration with Datavault AI to deploy watsonx-powered zero-trust micro data centers designed for ultra-low-latency processing at the network edge. The initiative, targeting manufacturing and smart-city customers, reduces inference latency by up to 80% compared with cloud-only deployments. IBM estimates that Edge AI offerings could contribute as much as 2% incremental revenue growth in fiscal 2026 and improve gross margins by up to 150 basis points, as customers pay premium subscription fees for on-premises AI inference and management services.