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IBM vs MSFT

IBM
International Business Machines Corporation
NEUTRAL
Price
$305.69
Market Cap
$285.74B
Sector
Technology
AI Confidence
75%
MSFT
Microsoft Corporation
BULLISH
Price
$370.17
Market Cap
$2.75T
Sector
Technology
AI Confidence
40%

Valuation

P/E Ratio
IBM
36.48
MSFT
23.18
Forward P/E
IBM
28.81
MSFT
19.64
P/B Ratio
IBM
10.24
MSFT
7.04
P/S Ratio
IBM
4.37
MSFT
9.01
EV/EBITDA
IBM
19.0
MSFT
15.88

Profitability

Gross Margin
IBM
57.81%
MSFT
68.59%
Operating Margin
IBM
17.17%
MSFT
47.09%
Profit Margin
IBM
12.09%
MSFT
39.04%
ROE
IBM
30.16%
MSFT
34.39%
ROA
IBM
6.35%
MSFT
14.86%

Growth

Revenue Growth
IBM
9.1%
MSFT
16.7%
Earnings Growth
IBM
--
MSFT
59.8%

Financial Health

Debt/Equity
IBM
2.38
MSFT
0.32
Current Ratio
IBM
0.93
MSFT
1.39
Quick Ratio
IBM
0.78
MSFT
1.24

Dividends

Dividend Yield
IBM
2.2%
MSFT
1.01%
Payout Ratio
IBM
79.86%
MSFT
21.28%

AI Verdict

IBM NEUTRAL

IBM trades at a premium valuation with solid historical profitability and consistent earnings beats, supported by strong ROE of 30.16% and a 9.1% YoY revenue growth. However, elevated P/E of 36.48 and forward P/E of 28.81 exceed both peer averages and historical norms, while weakening near-term EPS momentum—evidenced by a -5.4% Q/Q decline—raises concerns about sustainability. The stock has delivered strong price performance over 5Y (+232.3%) and 1Y (+50.0%), reflecting investor confidence in its hybrid cloud and AI转型, though leverage remains high at 2.38x Debt/Equity. Analysts broadly concur with a 'hold' recommendation, and absent insider activity, the setup appears balanced between proven execution and stretched near-term expectations.

Strengths
ROE of 30.16% significantly exceeds sector average of 27.63%, indicating superior capital efficiency
9.1% YoY revenue growth outpaces legacy peer expectations and reflects successful strategic repositioning
Consistent earnings beat streak: 3 out of last 4 quarters, with 8.63% average surprise over latest four
Risks
Elevated P/E of 36.48 vs sector avg 175.24 (distorted) but notably above peers like CSCO (30.12) and MU (32.56)
Debt/Equity ratio of 2.38 is more than triple the sector average of 0.74, raising refinancing and flexibility concerns
Q/Q EPS declined -5.4%, signaling potential softness in near-term profitability despite strong YoY growth
MSFT BULLISH

MSFT shows bullish fundamentals based on deterministic rules. Financial strength is strong (F-Score 7/9). Key strengths include strong valuation and growth metrics.

Strengths
Strong profitability (39.0% margin)
Strong financial trend (Piotroski F-Score: 7/9)
Strong revenue growth of 16.7%
Risks
Premium vs Graham Number ($137.5)

Compare Another Pair

IBM vs MSFT: Head-to-Head Comparison

This page compares International Business Machines Corporation (IBM) and Microsoft Corporation (MSFT) across key fundamental metrics including valuation ratios, profitability margins, growth rates, financial health indicators, and dividend metrics. Each metric highlights the better-performing stock so you can quickly identify relative strengths and weaknesses.

Our AI engine independently analyzes each company's financials, competitive position, and market conditions to produce a verdict (Bullish, Neutral, or Bearish) along with key strengths and risks. Use this comparison alongside your own research to make informed investment decisions.

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