After a standout 2025 packed with growth, tech giant International Business Machines (IBM) has stumbled this year. The stock is now down 12% so far in 2026, eating into the more than 80% gains it had piled up since 2021. The mood, however, may be turning: a major announcement this week points to a fresh generation of artificial-intelligence chips on the way, raising hopes of a rebound.
IBM today unveiled what it called the world's first sub-1-nanometer (nm) chip technology. According to the company, its new sub-1 nm chip squeezes nearly 100 billion transistors onto a piece of silicon the size of a fingernail, roughly twice the density of the 2 nm chip IBM showed off in 2021. The company says the new chip delivers a substantial leap in capability, supercharging compute for everything from generative AI and cloud infrastructure to next-generation electronic devices. Production could begin in as little as five years, by IBM's own estimate.
Betting Big on AI and Cloud
IBM is lining itself up for growth in AI and cloud computing, helped along by analyst upgrades and an upbeat view of its software performance. Earlier this week, JPMorgan analysts lifted the stock from Neutral to Overweight, with analyst Brian Essex pointing out that the company's software business keeps driving better recurring revenue, margins, profitability, and cash flow.
A Spending Spree That Is Paying Off
Despite the share-price slide, IBM has been spending heavily over the past year, and the bet has been paying off. Last month the stock surged after the Department of Commerce said it would contribute $1 billion to launch Anderon, a new standalone company set to build a quantum chip foundry in Albany, N.Y. IBM, for its part, is putting another $1 billion of its own cash into Anderon.
