IBM Continues to Plug Along, but Its Quantum Computing Bet Could Be the Real Catalyst
2026-10-26 19:58
•Geoffrey Seiler •The Motley Fool
•• ••• Axe Cap view
IBM’s Quantum Gamble: Worth Watching but Not Rushing In
IBM’s steady results hide its biggest potential upside: quantum computing, which remains a speculative bet.
IBM’s traditional business is ticking along nicely, with software, especially Red Hat, driving decent growth. That’s the good, steady part. The next real game changer lives in quantum computing—a field IBM hopes will revolutionize data processing. They’ve secured 16 enterprise deals and made technical strides, but this tech is still embryonic. Investors tempted by the headline technology should be wary: widespread commercial quantum use is likely years away, and IBM’s near-term valuation already prices in some of this optimism. For South African investors, this means any gains might play out through USD/ZAR moves—if the dollar strengthens on global tech enthusiasm, expect rand volatility. Until IBM’s quantum revenues materialize, it’s a wait-and-see story. The catch? If a breakthrough happens sooner than expected, IBM shares could leap. Though it’s equally possible the sector hits delays or competition from newer tech like IonQ slows IBM’s lead. this is just our opinion and not financial advice
Hold off on buying IBM here; watch developments in quantum computing closely while keeping an eye on the USD/ZAR rate for tech sentiment spillover.
- IBM
- USD/ZAR
- Quantum computing breakthrough delays
- Stronger competition from IonQ and Quantinuum
6/10
IBM's core business remains stable with Q3 revenue up 5% to $17.1B and software revenue climbing 8%, but the company's quantum computing ambitions are viewed as the primary growth catalyst. IBM is developing fault-tolerant quantum computers using qLDPC error-correcting codes and has signed 16 enterprise quantum agreements this year. With a forward P/E of 19, the stock is valued at market multiples, and analysts view it as a good addition to a broader quantum computing portfolio.
Our take is based on reporting first published by The Motley Fool.