IBM (IBM) and Oracle (ORCL) are closing out 2025 with strong momentum as their shares are up 41.5% and 24.2%, respectively, year-to-date. Analysts see IBM’s AI and quantum partnerships as a potential catalyst, while Oracle’s cloud and AI contracts are expected to fuel growth despite valuation concerns. The question now is which tech giant is better positioned for 2026.
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Let’s take a closer look at the fundamentals of both companies.
IBM Drives Quantum and AI Strategy
IBM has been steadily reshaping its business by focusing on artificial intelligence (AI), cloud services, and quantum computing. Recently, Oppenheimer analyst Param Singh reiterated a Buy rating on the stock with a $360 target. He sees potential for IBM’s expanding software portfolio to witness double-digit revenue growth, led by Automation and RedHat.
The company’s fundamentals remain solid, with recurring revenue jumping to $22.7 billion in fiscal Q3, boosted by strong software, infrastructure, and its new z17 mainframe. The growth reflects IBM’s focus on AI and hybrid cloud, including a $7.5 billion GenAI business.
Looking ahead, IBM’s revenue is expected to rise 4.5%, trailing the Technology sector’s 8.5% average. However, earnings are expected to surge 21.9%, standing out against the sector’s 7.6% decline.
Oracle Outperforms S&P 500 as Cloud and AI Deals Drive Growth
Oracle stock has outperformed the S&P 500 (SPX) so far in 2025, as investors reward its aggressive push into cloud infrastructure and AI partnerships. The company’s steady revenue growth comes from enterprise software and databases, and offers higher near term growth potential through cloud deals with major AI players, including OpenAI (PC:OPAIQ).
However, valuation concerns linger, with some analysts trimming targets and warning that Oracle may be priced for perfection. Still, Oracle’s robust fundamentals and expanding data center footprint position it as a growth leader in enterprise tech.
Importantly, Oracle is likely to outpace its peers, with revenues expected to climb 9.7% and earnings rising 11.2%. This compares favorably to the broader Tech sector’s 8.5% revenue growth and 7.6% earnings decline.
IBM or ORCL: Which Stock is a Better Buy, According to Analysts?
Overall, IBM offers steady fundamentals with strong earnings growth potential, while Oracle delivers faster revenue expansion through cloud and AI momentum.
Using the TipRanks Stock Comparison Tool, we compared IBM and Oracle to see which stock analysts favor. IBM carries a Moderate Buy rating with an average price target of $300.58, implying about 1% downside risk from current levels. In contrast, ORCL stock has a Moderate Buy rating, and its price target of $355.60 suggests around 73.5% upside potential.
