IBM's (IBM, $124.79) Largest Deal: Will Acquire Cloud Firm Red Hat (RHT, $116.68) For $34 Billion
In what could be the third largest deal in the history of U.S. technology, IBM will be acquiring open-source software company Red Hat for $34 billion. The combined entity could potentially emerge as the next behemoth in cloud computing – one of the most in-demand services today.
IBM will pay in cash to buy all shares in Red Hat at $190 each. IBM is advised by Goldman Sachs, J.P. Morgan and Lazard, while Red Hat is advised by Morgan Stanley and Guggenheim on the deal. If the deal passes regulatory and shareholder approvals, Red Hat’s operations will become a part of IBM’s Hybrid Cloud division. The deal might close in second half of next year.
Cloud technology essentially provides services such as data storage, database management, networking, access to servers access , software solutions, analytics, intelligence and more via the internet. Dropbox, Flickr, Google Drive, Netflix, Microsoft Office 365 and Yahoo Mail are examples of cloud services.
IBM-Red Hat merger is expected to help businesses/users have a smoother transition or transfer of data between different cloud platforms, and to keep users' data secure irrespective of which cloud technologies they use.
This year saw several other major acquisitions in the open source space. Microsoft acquired code-sharing platform GitHub for $7.5 billion. Salesforce bought Mulesoft (a firm that helps to collate different software applications, data and devices) for $6.5 billion. Also, Cloudera and Hortonworks announced a $5.2 billion deal to merge.
According to IBM and Red Hat, their deal would be the "most significant tech acquisition of 2018." .In recent times, IBM signed cloud contracts with Economical Insurance, ExxonMobil and Novis. What’s more, Red Hat is in partnerships with major cloud players including Amazon, Microsoft and Google - that means, following the IBM-Red Hat deal, IBM might be offering solutions to its current competitors as well.
IBM's CFO Jim Kavanaugh told investors earlier this month that its cloud business raked in $19 billion in revenue , which is more than 20% from the same time last year. Its acquisition of Red Hat (IBM's largest deal ever) could potentially bolster its cloud solutions even more.
IBM in +1.68% Uptrend, rising for three consecutive days on July 07, 2025
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where IBM advanced for three days, in of 358 cases, the price rose further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on June 05, 2025. You may want to consider a long position or call options on IBM as a result. In of 82 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 284 cases where IBM Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for IBM moved out of overbought territory on July 01, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 50 similar instances where the indicator moved out of overbought territory. In of the 50 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 59 cases where IBM's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for IBM turned negative on July 02, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 35 similar instances when the indicator turned negative. In of the 35 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where IBM declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
IBM broke above its upper Bollinger Band on June 09, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 81, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. IBM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (10.040) is normal, around the industry mean (17.594). P/E Ratio (49.644) is within average values for comparable stocks, (51.381). Projected Growth (PEG Ratio) (2.153) is also within normal values, averaging (1.692). Dividend Yield (0.023) settles around the average of (0.023) among similar stocks. P/S Ratio (4.346) is also within normal values, averaging (13.440).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
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a manufacturer of various computer products through the use of advanced information technology
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