S&P 500 · mainframe & hybrid cloud
IBM
IBM holds the 'trust layer' of enterprise IT — a large share of the world's high-value transactions runs on IBM Z mainframes, and the hybrid backbone enterprises use to avoid single-cloud lock-in (Red Hat) is IBM's. After a lost decade, its re-rating (2024 +39%, 2025 +38%) rides three converging engines — the z17 mainframe upgrade cycle, Red Hat-led software acceleration, and a >$12.5B gen-AI book. FY2025 revenue was $67.5B (+8%, best in nearly a decade) with $14.7B of free cash flow, which it recycles into software acquisitions (HashiCorp and others) to reshape the mix. But it only designs its chips — Samsung Foundry makes them and its AI compute rides NVIDIA — so IBM sits above the silicon, dependent on both.
IBM Updated Jul 12, 2026 3 AI consumers· 1 recurring
Per the valuechain.wiki graph, IBM is directly linked to 2 companies (2 supply, 0 revenue relationships) and reaches 98 companies within two hops; the links are backed by 9 dated sources, 2 of them primary filings (as of 2026-07-12).
Financials & Segments
- Total revenue · Revenue $67.5B (FY2025, +8% — best in nearly a decade), net income $10.59B, diluted EPS $11.17, FCF $14.73B. The year the mix tilted from cyclical hardware to recurring software.
- Customer concentration · Profit and the re-rating come from a growing software (high-margin, recurring) mix, the mainframe cycle, and $14.7B of free cash flow. Upside is converting the >$12.5B gen-AI book into software; downside is Consulting's macro drag. Its chips depend on Samsung Foundry and its AI compute on NVIDIA.
- Segments · Software - Red Hat, automation, Data & AI (watsonx) · Infrastructure - IBM Z mainframe (z17), Power, storage · Consulting - hybrid cloud, business transformation
Revenue from
- 기업 (z17 메인프레임·왓슨x) High confidence
IBM Z mainframes process a large share of the world's high-value transactions (banking, airlines, retail) — a switching-cost-locked, captive install base. The z17/Telum II upgrade cycle (IBM Z +59% at launch) monetizes that base every few years, and Red Hat and watsonx layer recurring revenue on top. FY2025 revenue $67.5B (+8%) with a >$12.5B gen-AI book — the mix is tilting from cyclical hardware to recurring software.Confirms EN Blocks and Files Published Oct 24, 2025: IBM rides mainframe and AI wave to strongest growth in years - 양자 생태계 (스탈링 로드맵) Medium confidence
IBM's Starling roadmap (large-scale fault-tolerant quantum by 2029) is a long-dated option — it sells cloud quantum access via IBM Quantum and positions as the enterprise on-ramp. IonQ and Rigetti are rivals, not customers, so this edge is the ecosystem/demand axis, not a supplier link (no cpid).Mentions EN Blocks and Files Published Oct 24, 2025: IBM rides mainframe and AI wave to strongest growth in years
Pays to
- Samsung Electronics (foundry — Telum/Power fabrication) High confidence
IBM designs Telum/Power but fabricates nothing itself — Samsung Foundry makes Telum II on 5nm (600mm2, 43bn transistors) and Telum/Power10 on 7nm EUV, a 10+-year partnership. It followed IBM's 2015 exit from its own fabs (sold to GlobalFoundries, then litigation over GF's failed 7nm handoff, settled 2024) and the move of leading-edge chips to Samsung — so the z17 cycle rides Samsung yields.Confirms KO ZDNet Korea Published Dec 16, 2021: Samsung Foundry wins Qualcomm, IBM, Google, ST — makes IBM's Power10 (7nm)/Power11 (5nm) server CPUs - NVIDIA (AI compute — watsonx, IBM Cloud) Medium confidence
IBM sells the enterprise-AI 'layer' but buys the compute beneath it from NVIDIA — watsonx.data's Presto engine is accelerated by NVIDIA cuDF/GPUs (a Nestle test showed 30x price-performance), and the two expanded their collaboration at GTC 2026. watsonx economics ride NVIDIA silicon, so scaling the AI book deepens dependence on NVIDIA compute.
Investments
- Red Hat (2019 acquisition, $34B) High confidence
The $34B 2019 Red Hat acquisition is the pivot that turned IBM from declining hardware/services to hybrid-cloud software — OpenShift (ARR +30%+) is the software growth engine, and multi-cloud neutrality ('locked to no single cloud') became IBM's moat, the foundation for its later software roll-up. - HashiCorp (2025 acquisition, $6.4B) High confidence
The $6.4B February 2025 HashiCorp (Terraform, Vault) acquisition extends Red Hat into infrastructure automation and secrets management — following Apptio, Turbonomic and StreamSets, a deliberate roll-up that uses free cash flow to buy recurring-revenue software and lift the group mix toward software.
Value-chain ripple (2 tiers)
Following node-to-node links up to 2 tiers; each firm is shown once, at its nearest tier.
| Company | Chain | '21 | '22 | '23 | '24 | '25 | YTD |
|---|---|---|---|---|---|---|---|
| IBM | node | +16.7 | +10.6 | +21.8 | +39.3 | +38.2 | -1.6 |
| Samsung Electronics | benef1 | -9 | -14.2 | +20.9 | -26.4 | +212.9 | +77.9 |
| NVIDIA | benef1 | +125.5 | -50.3 | +239 | +171.2 | +38.9 | +13.3 |
| Samsung Electro-Mechanics | benef2 | -11.8 | -18.5 | -1.4 | -2.5 | +110 | +467.7 |
| Jusung Engineering | benef2 | +127.9 | -42.6 | +173.3 | -3.1 | +30.7 | +364.1 |
| Kioxia | benef2 | · | · | · | · | +1082.1 | +260.5 |
| Micron Technology | benef2 | +24.2 | -45.9 | +71.9 | -1 | +240.2 | +243.3 |
| SUMCO Corporation | benef2 | -4.3 | -3.9 | +21.3 | -48.1 | +41.7 | +225.8 |
| Murata Manufacturing | benef2 | -14 | -11.7 | +24.7 | -16.5 | +29.9 | +217.4 |
| PSK Inc | benef2 | +22.7 | -19.6 | +14.2 | -2.6 | +228.2 | +208 |
| LG Innotek | benef2 | +78.2 | -22 | -28.8 | -22.1 | +66.8 | +204.6 |
| GlobalWafers | benef2 | +26.9 | -29.9 | +14.3 | -39 | +48.9 | +171.6 |
| ASE Technology | benef2 | +38.3 | -12.8 | +60.9 | +10.1 | +65.6 | +167.6 |
| Nebius Group | benef2 | · | · | · | · | +202.2 | +162.4 |
| Astera Labs | benef2 | · | · | · | · | +25.6 | +148.2 |
| Ibiden | benef2 | +30.4 | -19.6 | +51.6 | -38.6 | +261 | +147.1 |
| Cohu | benef2 | -0.2 | -15.9 | +10.4 | -24.6 | -12.8 | +141.4 |
| SK hynix | benef2 | -0.4 | -25.6 | +53.9 | +48.6 | +361.1 | +140.3 |
| Applied Materials | benef2 | +83.6 | -37.5 | +68 | +1.1 | +59.6 | +135 |
| Unimicron | benef2 | +133.5 | -30.2 | +35.2 | -19.7 | +175.7 | +131.6 |
| MediaTek | benef2 | +27.8 | -26.6 | +52.9 | +58.3 | +24.9 | +124.3 |
| Arteris | benef2 | · | -79.6 | +37 | +73 | +52.1 | +124.3 |
| Lumentum | benef2 | +11.6 | -50.7 | +0.5 | +60.1 | +339.1 | +117.6 |
| FormFactor | benef2 | +6.3 | -51.4 | +87.6 | +5.5 | +26.8 | +110.7 |
| KC Tech | benef2 | -24.2 | -6.1 | +57.9 | +5.9 | +56.7 | +108.1 |
| Lam Research | benef2 | +53.7 | -40.7 | +88.6 | -6.8 | +139.2 | +105 |
| Onto Innovation | benef2 | +112.9 | -32.7 | +124.6 | +9 | -5.3 | +103.6 |
| Simmtech | benef2 | +119.6 | -34.6 | +12.4 | -63.3 | +392.9 | +94.9 |
| Daeduck Electronics | benef2 | +64.2 | -0.3 | +13.3 | -22.7 | +250.2 | +92.1 |
| KLA | benef2 | +68 | -11.2 | +56 | +9.4 | +94.5 | +91 |
| SCREEN Holdings | benef2 | +40.7 | -13.2 | +220.1 | -24.1 | +84.9 | +86.3 |
| Teradyne | benef2 | +36.8 | -46.3 | +24.8 | +16.5 | +54.4 | +85.9 |
| ASMPT | benef2 | -29 | -12.4 | +21.8 | -4.8 | +47.6 | +82 |
| Resonac | benef2 | -2.6 | -4 | +37.5 | +30.3 | +137.9 | +80.4 |
| Tokyo Electron (TEL) | benef2 | +40.4 | -14.5 | +89.8 | -4.4 | +61.6 | +78.2 |
| onsemi | benef2 | +107.5 | -8.2 | +33.9 | -24.5 | -14.1 | +77.2 |
| Qnity Electronics | benef2 | · | · | · | · | · | +76.3 |
| Coherent | benef2 | -10 | -48.6 | +24 | +117.6 | +94.8 | +75.8 |
| Eoptolink | benef2 | -10.1 | -27.7 | +136.6 | +197 | +368.8 | +74.9 |
| Entegris | benef2 | +44.6 | -52.5 | +83.5 | -17.1 | -14.6 | +72.8 |
| Kokusai Electric | benef2 | · | · | · | -35.4 | +165.3 | +70 |
| InnoLight | benef2 | -30.7 | -18.3 | +253.7 | +12 | +468.1 | +68.8 |
| ASML | benef2 | +64.1 | -30.5 | +39.9 | -7.7 | +55.8 | +68.6 |
| Foosung | benef2 | +59.9 | -33.5 | -34.5 | -39.1 | +67.4 | +62.2 |
| Keysight Technologies | benef2 | +56.3 | -17.2 | -7 | +1 | +26.5 | +58.5 |
| BESI | benef2 | +33.7 | -6.1 | +121.8 | -9.3 | +35 | +56.2 |
| Delta Electronics | benef2 | -3.4 | +10.4 | -0.3 | +59.2 | +183.8 | +54.9 |
| Fujimi Incorporated | benef2 | +64.7 | -1.6 | +40.4 | -24.2 | +28.4 | +54.6 |
| Monolithic Power | benef2 | +35.5 | -27.8 | +79.8 | -5.6 | +54.5 | +49.8 |
| Eugene Technology | benef2 | +28.1 | -45.1 | +64.1 | -12.6 | +202.5 | +49.5 |
| Montage Technology | benef2 | -18.2 | -21.8 | -18 | +51.4 | +169 | +47.4 |
| Analog Devices | benef2 | +21 | -4.9 | +23.4 | +8.8 | +29.8 | +46.7 |
| Shin-Etsu Chemical | benef2 | +6.3 | +3.1 | +57.8 | -15.6 | +7.6 | +44 |
| Samsung E&A | benef2 | +74.5 | +20 | -13.7 | -15.9 | +76.7 | +43.2 |
| Tokyo Ohka Kogyo (TOK) | benef2 | -2.7 | -3 | +63.8 | +4.3 | +111.5 | +42.9 |
| Camtek | benef2 | +110.1 | -52.3 | +215.9 | +18.3 | +31.7 | +35.2 |
| Ebara | benef2 | +58.1 | +2.3 | +76.1 | +41 | +84 | +32.3 |
| ASM International | benef2 | +44.2 | +2.9 | +68.7 | +10.3 | +25.9 | +28.8 |
| ABB | benef2 | +23.9 | +7.3 | +18.9 | +39 | +36.1 | +27.2 |
| Powertech Technology (PTI) | benef2 | +4.8 | -7.5 | +86 | -16 | +128.6 | +26 |
| Linde | benef2 | +33.4 | -4.4 | +27.7 | +3.2 | +3.2 | +25.1 |
| Pegatron | benef2 | -5.9 | +0.6 | +35.3 | +21.2 | -23.8 | +24 |
| Air Products and Chemicals | benef2 | +13.8 | +3.9 | -9 | +8.1 | -12.7 | +23.7 |
| Lasertec | benef2 | +78.9 | +2.4 | +57 | -60.6 | +138.9 | +22.4 |
| Luxshare Precision | benef2 | -11.9 | -30.2 | -21.2 | +58.8 | +29.3 | +20.6 |
| Digital Realty | benef2 | +30.7 | -41 | +39.9 | +35.9 | -10.1 | +18.2 |
| Amphenol | benef2 | +34.9 | -12 | +31.5 | +41.3 | +96.1 | +18.1 |
| Sumitomo Chemical | benef2 | +19.6 | -9.1 | -27.7 | -2.2 | +43.9 | +16 |
| Nepes | benef2 | -29.5 | -44 | +6.7 | -62.7 | +179.2 | +15.1 |
| Wistron | benef2 | +7.9 | +9.7 | +272.7 | -1.6 | +22.7 | +14.8 |
| Merck KGaA (EMD) | benef2 | +42.2 | -0.4 | -19.1 | -2.5 | -12.7 | +13.5 |
| Air Liquide | benef2 | +14.1 | +7.9 | +20.9 | +8.5 | -4.8 | +12.5 |
| Disco Corporation | benef2 | -6.6 | +27.7 | +218.5 | +11.6 | +49.6 | +10.2 |
| Wonik QnC | benef2 | +26.2 | +2 | +11.9 | -33.7 | +53.4 | +9.3 |
| Wonik IPS | benef2 | -19.7 | -19.8 | -0.2 | -25.5 | +408.8 | +9.3 |
| Hanmi Semiconductor | benef2 | +98.5 | -21.7 | +313.1 | +93.7 | +87.9 | +5.5 |
| Qorvo | benef2 | -5.9 | -42 | +24.2 | -37.9 | +20.8 | +1.5 |
| EO Technics | benef2 | +7.6 | -28.2 | +130.5 | -16.2 | +163.2 | +0.7 |
| ISC | benef2 | +43.2 | +14.2 | +116.5 | -11.9 | +126.8 | +0.3 |
| BlackRock | benef2 | +29.4 | -20.4 | +17.9 | +29.3 | +6.6 | -2.1 |
| HPSP | benef2 | · | · | +216.5 | -30.4 | +54.7 | -4.5 |
| LG Display | benef2 | -6.8 | -30.9 | -8.5 | -20.6 | +26.2 | -5.7 |
| Photronics | benef2 | +68.9 | -10.7 | +86.4 | -24.9 | +35.8 | -6.6 |
| Park Systems | benef2 | +25.1 | +1.6 | +41.6 | +37.3 | +28.9 | -11.2 |
| TE Connectivity | benef2 | +35.1 | -27.7 | +24.6 | +3.5 | +61.1 | -11.3 |
| Recursion Pharmaceuticals | benef2 | · | -55 | +27.9 | -31.4 | -39.5 | -13 |
| Hana Materials | benef2 | +106 | -30.5 | +26.1 | -47.4 | +173.9 | -15.7 |
| Dongjin Semichem | benef2 | +28.1 | -13.7 | +16.1 | -42.8 | +160.1 | -15.8 |
| Uni Test | benef2 | +23.4 | -57.8 | +11.3 | -1.6 | +6.8 | -24.8 |
| ENF Technology | benef2 | -32.9 | -23.6 | +1.3 | -16.1 | +204.6 | -28.4 |
| Leeno Industrial | benef2 | +21 | -5.3 | +18.3 | +9.5 | +150.1 | -30.3 |
| SFA Semicon | benef2 | -5.8 | -34.1 | +48.7 | -48.7 | +139.8 | -31.8 |
| BYD Electronics | benef2 | -56.1 | +16 | -0.4 | +60.6 | -19.4 | -34.4 |
| Soulbrain | benef2 | -8.2 | -3.9 | +16.6 | -37.6 | +192.8 | -35.9 |
| S&S Tech | benef2 | -17.3 | -5 | +45.8 | -31.2 | +210.8 | -47.5 |
YTD as of 2026-07-10 · source: Yahoo Finance
IBM's thesis is 'a software re-rating on top of a mainframe cash cow.' IBM Z (z17/Telum II) monetizes a switching-cost-locked captive base on a multi-year cycle (Infrastructure +12.1%), and on top of it Red Hat (OpenShift ARR +30%+) and watsonx grow recurring revenue (Software +10.6%). The substance of the re-rating is recycling $14.7B of free cash flow into software acquisitions (HashiCorp and others) to expand the high-margin mix — the >$12.5B gen-AI book is the metric of that shift. Risks are Consulting's macro drag (+1.8%) and whether the AI book converts to durable software. In the value chain IBM only designs, depending on Samsung Foundry for chips (Telum 5nm) and NVIDIA for AI compute, exposing it to upstream silicon risk. Graph exposure runs IBM<-Samsung (foundry), IBM<-NVIDIA (GPU) and IBM->Red Hat/HashiCorp (software roll-up).
Analysis generated from returns as of 2026-07-12