IBM vs ORCL Stock Comparison: AI Score, Valuation, Performance and Upside
ORCL has transformed into a major AI infrastructure provider through its rapidly growing OCI cloud business with a massive contracted backlog, while IBM offers steadier, more diversified hybrid cloud, consulting, and AI software exposure with a more conservative growth profile. Oracle's AI infrastructure bet carries higher growth potential but also more capital intensity and customer concentration risk.
IBM vs ORCL contrasts a diversified, steady enterprise software and services company against a database giant that has aggressively reinvented itself as a major AI infrastructure provider.
ORCL holds the edge across 5 of 5 key metrics in this comparison. ORCL leads on both 1-year return (-11.48%) and forward P/E (16.94x vs 20.28x for IBM), a relatively favorable combination of momentum and valuation. ORCL leads on both revenue growth (20.60%) and operating margin (36.26%), suggesting a stronger fundamental setup on both dimensions. Analyst consensus implies meaningfully more upside for ORCL (+38.70%) than for IBM (+6.85%).
- →Want diversified exposure across hybrid cloud, consulting, and AI software
- →Value Red Hat's open-source hybrid cloud positioning
- →Prefer steadier, lower-volatility enterprise technology exposure
- →Want direct exposure to the AI infrastructure buildout through OCI
- →Believe Oracle's massive backlog signals durable multi-year growth
- →Are comfortable with high capital spending and customer concentration risk
| Metric | IBM | ORCL |
|---|---|---|
| AI score | 49.8 | 51.3 |
| AI rank | #486 | #384 |
| Latest close | $249.10 | $184.29 |
| 1M return | +12.04% | +1.56% |
| 6M return | -17.88% | +3.27% |
| 1Y return | -11.99% | -11.48% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | IBM | ORCL |
|---|---|---|
| 1Y ago | $8.8K (-12.0%) started 2025-06-18 | $8.74K (-12.6%) started 2025-06-18 |
| 5Y ago | $25.38K (+153.8%) started 2021-06-21 | $26.56K (+165.6%) started 2021-06-21 |
| 10Y ago | $40.56K (+305.6%) started 2016-06-20 | $61.9K (+519.0%) started 2016-06-20 |
Hypothetical — past performance does not guarantee future results.
| Metric | IBM | ORCL |
|---|---|---|
| Market cap | $255.87B | $529.57B |
| Trailing P/E | 24.09 | 31.53 |
| Forward P/E | 20.28 | 16.94 |
| Price/Sales | 3.98 | 8.75 |
| EV/Revenue | 4.56 | 9.71 |
| Analyst target | $290.89 | $255.38 |
| Target upside | +6.85% | +38.70% |
| Metric | IBM | ORCL |
|---|---|---|
| Revenue growth | 9.50% | 20.60% |
| Earnings growth | 14.20% | 21.90% |
| EPS growth | +14.20% | +21.90% |
| FCF margin | +18.98% | -30.19% |
| Operating margin | 13.81% | 36.26% |
| Profit margin | 15.61% | 25.37% |
| ROIC proxy | 35.77% | 53.38% |
| Return on equity | 35.77% | 53.38% |
| Dividend yield | 2.48% | 1.09% |
| Beta | 0.67 | 1.66 |
| Debt/equity | 211.17 | 362.76 |
| Current ratio | 0.80 | 1.11 |
| Quick ratio | 0.64 | 1.01 |
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | IBM | ORCL |
|---|---|---|---|
| 1Y | Growth | -12.04% | -12.60% |
| CAGR | -12.06% | -12.62% | |
| Sharpe ratio | -0.24 | 0.02 | |
| Max drawdown | 31.86% | 58.43% | |
| Max daily drop | 13.15% | 10.83% | |
| Max wkly drop | 15.72% | 22.10% | |
| 5Y | Growth | +110.67% | +150.32% |
| CAGR | +16.10% | +20.18% | |
| Sharpe ratio | 0.52 | 0.54 | |
| Max drawdown | 31.86% | 58.43% | |
| Max daily drop | 13.15% | 13.79% | |
| Max wkly drop | 15.72% | 22.10% | |
| 10Y | Growth | +151.19% | +433.30% |
| CAGR | +9.65% | +18.23% | |
| Sharpe ratio | 0.31 | 0.52 | |
| Max drawdown | 40.59% | 58.43% | |
| Max daily drop | 13.15% | 13.79% | |
| Max wkly drop | 20.64% | 22.10% |
| Category | IBM | ORCL |
|---|---|---|
| Company | International Business Machines Corporation | Oracle Corporation |
| Sector | Technology | Technology |
| Industry | Information Technology Services | Software - Infrastructure |
| Core business | IBM provides enterprise software (including Red Hat hybrid cloud), consulting services, and AI solutions through its watsonx platform, alongside legacy mainframe and infrastructure businesses. | Oracle provides database software, enterprise applications (ERP, HCM), and a rapidly growing cloud infrastructure (OCI) business that has become a major AI training and inference provider for large customers including OpenAI. |
| Investor focus | Investors track Red Hat hybrid cloud growth, watsonx AI platform adoption, consulting segment bookings, and the durability of IBM's mainframe (System z) revenue cycle. | Investors track Oracle Cloud Infrastructure (OCI) revenue growth and capacity buildout, remaining performance obligations (RPO) backlog tied to large AI compute contracts, and core database/applications cloud migration. |
- →Red Hat acquisition provides strong hybrid cloud and open-source positioning
- →Large, sticky enterprise consulting and services relationships
- →Mainframe business generates durable, high-margin recurring revenue
- →OCI has emerged as a major AI infrastructure provider with massive contracted backlog
- →Dominant, sticky enterprise database franchise provides durable cash flow
- →Large remaining performance obligations backlog provides multi-year revenue visibility
- →Slower overall growth profile than faster-growing cloud-native competitors
- →watsonx AI platform still building market share against larger AI platform providers
- →Legacy infrastructure businesses face long-term secular pressure
- →Massive capital spending required to build out AI data center capacity
- →OCI growth increasingly concentrated in a small number of very large AI customers
- →High debt levels taken on to fund aggressive infrastructure investment
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