ETFs to Monitor as IBM Stock Rises After Strong Q4 Earnings

February 3, 2026

Shares of IBM, a major player in international office machinery, jumped 5.1% on January 29, following the announcement of better-than-expected results for the fourth quarter of 2025. The company surpassed analysts’ predictions regarding both sales and profits.

Looking forward, IBM anticipates annual revenue growth to surpass 5% by the close of 2026, on a constant currency basis. This forecast is grounded in a solid product portfolio, enhanced operational efficiency, and boosts to productivity. Additionally, free cash flow is expected to increase by $1 billion.

This optimistic outlook, paired with impressive quarterly performance, has bolstered investor confidence in IBM’s stock, resulting in continued price gains. Just yesterday, IBM’s stock rose another 1.8% compared to its levels on January 29.

In light of these developments, investors in exchange-traded funds (ETFs), particularly those with an interest in technology, might consider gaining exposure to IBM by investing in ETFs with significant holdings in the company.

However, before diving into ETF suggestions, it’s worth taking a closer look at IBM’s fourth-quarter results, analyzing the company’s performance across various metrics, and assessing the market’s reactions to any upgrades or downgrades.

For the fourth quarter, IBM reported adjusted earnings per share (EPS) of $4.52, surpassing the Zacks Consensus Estimate by 4.4%. Revenue also exceeded consensus expectations by 2.5%. In comparison to the previous year, both EPS and revenue saw double-digit growth.

The company’s revenue growth for this quarter was 9% in constant currency, marking the highest level in over three years.

All four of IBM’s segments experienced positive year-on-year growth, with Infrastructure showing the most significant increase—21%, largely due to the strength of the z17 platform.

By the end of the fourth quarter, IBM’s GenAI business exceeded $12.5 billion, with over $2 billion coming from software and more than $10.5 billion from consulting, both achieving record quarterly growth.

In the realm of quantum computing, IBM made notable advancements during the last quarter of 2025. They improved their development roadmap, worked on error correction enhancements, and expanded partnerships within the ecosystem. Collaborations with organizations like Cisco aimed to develop scalable quantum systems, alongside participation in initiatives such as the U.S. Department of Energy’s Genesis mission and DARPA’s Quantum Benchmarking Initiative. IBM remains on schedule to deliver its first large-scale, fault-tolerant quantum computer by 2029.

In terms of finances, IBM concluded 2025 with $14.5 billion in cash and solid liquidity. Over the year, the company invested $8.3 billion in acquisitions and returned $6.3 billion to shareholders through dividends.

Moreover, free cash flow increased to $7.55 billion in the fourth quarter, up from $6.16 billion in the same period last year, thanks to improved profitability and better working capital management.

After IBM’s fourth-quarter earnings report, Bank of America analyst Wamsi Mohan reiterated a Buy rating on the stock, increasing his price target from $335 to $340.

Similarly, Bernstein SocGen Group analyst Mark C. Newman raised his price target for IBM from $280 to $330 while keeping a “Market Perform” rating.

With these positive updates and IBM’s optimistic outlook, investors might want to consider adding specific ETFs to their watchlists. Investing in these could ensure exposure to IBM while minimizing risks associated with single-stock investments.

First Trust Nasdaq Technology Dividend Index Fund TDIV

This fund boasts net assets of $3.81 billion and focuses on 93 technology and communication companies that pay regular dividends. IBM holds a significant position in the ETF, at 7.81% of its assets.

TDIV has risen 24.7% over the past year, with a fee of 50 basis points.

FT Best Technology Dividend Target Income ETF TDVI

This ETF, with net assets of $281 million, aims to provide recurring income along with capital appreciation. IBM is also second in this fund, representing 7.81% of its assets.

TDVI has appreciated by 14.9% over the past year, with a fee of 75 basis points.

AXS Green Alpha ETF NXTE

This actively managed fund gives exposure to 53 companies meeting sustainability goals, such as increasing productivity and promoting renewable energy. IBM has a 6.04% stake in this ETF.

NXTE has climbed 28.3% over the past year, with a fee of 100 basis points.

State Street SPDR Portfolio S&P Sector Neutral Dividend ETF SPDG

This fund, with $11.8 million in net assets, provides exposure to a diverse range of companies that have sustained or increased their dividends for seven years or more. IBM ranks third in this ETF with a weight of 5.71%.

SPDG has seen a 13% increase over the past year, with a minimal fee of 5 basis points.

Invesco Dow Jones Industrial Average Dividend ETF DJD

With a market value of $415.7 million, this ETF offers exposure to 29 dividend-paying stocks. IBM holds the sixth position here, representing 5.40% of the fund.

DJD has appreciated by 13.1% over the past year, carrying a fee of 7 basis points.