The artificial intelligence revolution is moving quickly, and this shows in the strong demand for AI hardware. The global AI chip market is expected to reach almost $92 billion in revenue by the end of 2025, driven by constant innovation and the need for faster, more efficient data processing in many industries. International Business Machines (IBM) is well placed in this fast-growing space. The company has delivered solid returns for shareholders, with its stock up over 56% from its 52-week lows. IBM’s market capitalization now stands at $263 billion, showing that investors are gaining confidence in its focus on AI and hybrid cloud solutions.

The timing of IBM’s next move is important. On July 25, just two days after the release of its Q2 2025 earnings report, IBM will introduce its most significant hardware upgrade in years.  The company will launch the Power11 server lineup, the first big update to its “Power” chip architecture since 2020. 

Could this announcement secure IBM’s place as a leader in AI infrastructure? And what might it mean for investors looking ahead to the launch? Let’s find out.

A Status Check on IBM

International Business Machines (IBM) is a well-known name in enterprise technology, building on its long history in hardware with renewed focus on AI, hybrid cloud, and key software solutions for sectors like banking, healthcare, and government. Over the past year, investors have noticed this shift. IBM’s stock is up 55% over the last 52 weeks and has gained 29% so far this year.

IBM trades at a forward P/E of 25.9x, which is higher than the sector average of 24x. 

Financial results from the latest quarter show steady progress. Revenue came in at $14.5 billion, a 1% increase from last year, with software growing by 7%. Margins are getting better too, with gross profit at 55.2% (GAAP), up 170 basis points. Together, this puts IBM in a good position as it gets ready to launch the new AI-focused Power11.

What’s Driving IBM’s Next Chapter

IBM is moving into its next phase by focusing on AI-powered infrastructure and making sure its systems are reliable for big businesses. The new Power11 servers, coming out on July 25, are a big part of this shift. They are built to run nonstop, with no planned downtime and the ability to spot ransomware threats in less than a minute. 

These servers are designed for important jobs in banking, healthcare, retail, and government, offering near-constant uptime and flexible options, whether companies want to use them on-site or through IBM Cloud. This is more than just a simple upgrade; it’s how IBM is meeting the bigger demands of the AI era.

IBM’s partnership with DBmaestro adds to its strengths, bringing in advanced tools for database automation, security, and real-time monitoring. This helps businesses manage changes quickly and safely as they move further into digital operations.

For investors who care about steady income, IBM stands out. The company offers a 2.4% annual dividend yield, with 30 years of increases and a payout ratio of 57.86%. Compared to the tech sector’s average yield of 1.37%, IBM’s steady approach to dividends is a key reason many investors continue to trust the company as it moves forward.

Analyst Sentiment and What Lies Ahead

The company’s next earnings report is set for July 23, after the market closes, and there’s a lot of anticipation. For the quarter ending June 2025, the average earnings estimate is $2.64 per share, up from $2.43 last year. Second-quarter revenue is expected to come in between $16.40 billion and $16.75 billion.

Most analysts are still positive. The 21 surveyed rate IBM as a consensus “Moderate Buy,” with an average price target of $263.70. The stock is already trading above that, which shows investors are expecting more good news soon, especially with the July 25 product launch coming up.

Conclusion

July 25 is shaping up to be a milestone for IBM and its investors, with the Power11 launch promising to push the company further into the AI spotlight. Backed by solid financials, a steady dividend, and growing analyst optimism, even as the stock trades above consensus targets, IBM’s next move could set the tone for its future in enterprise tech. 

For those watching the stock, this is one event you won’t want to miss, as it could mark the start of a new era for Big Blue.