IBM’s Blockchain Patent Sale Offers a Rare Bright Spot Amid a Crisis of Credibility
Published on 07/29/2026 at 03:02 | Redaktion boerse-global.de
IBM shares climbed 5.61% to €200.15 on Tuesday, extending a recovery that has seen the stock gain 10.82% over the past week. The catalyst was an unexpected deal: Circle Internet Group, the issuer of the USDC stablecoin, has acquired the bulk of IBM’s blockchain patent portfolio. The transaction, announced July 27, covers more than 680 patent families and nearly 1,000 granted patents worldwide, spanning blockchain fundamentals, banking, insurance, supply-chain verification, and secure cloud operations.
Circle did not disclose financial terms but stated the acquisition makes it the largest holder of blockchain patents in the United States. The company plans to deploy the intellectual property to support USDC, its Circle Payments Network, and a new enterprise blockchain called Arc. Both firms said they would explore joint commercial opportunities, though no specifics were provided. For IBM, the sale monetizes a technology it spent over a decade building. PatSnap data from December 2025 showed IBM held 790 US blockchain patents — more than four times the count of second-place Bank of America, which had roughly 200.
The patent sale provides a rare positive headline for a company still reeling from its worst single-day loss in 115 years. On July 23, IBM shares hit a 52-week low of €175.14, and the stock remains nearly a third below its June peak of €292.85. The rout began earlier this month when CEO Arvind Krishna warned that the second quarter would come in “worse than expected,” triggering a 25.2% one-day collapse that wiped out more than $68 billion in market capitalization. The decline surpassed even the Black Monday crash of October 1987.
Krishna attributed the miss to a shift in corporate spending: clients redirected quarterly budgets toward servers, storage, and memory chips to hedge against anticipated price increases on scarce hardware. IBM had expected some supply-chain disruption, Krishna said, but not the magnitude of the budget reallocation. The warning set off a wave of legal scrutiny. BFA Law is investigating whether IBM misled investors about the pace of large business deals and the outlook for its Z-series mainframes, following quarterly results on July 14 that revealed a sharp decline in transaction-processing revenue. Hagens Berman is separately probing potential violations of US securities law.
Should investors sell immediately? Or is it worth buying IBM?
The full second-quarter earnings report, released a week after the initial warning, offered some relief. Software revenue reached $7.8 billion, up 5% year over year, with hybrid cloud jumping 11%. The infrastructure division, however, continued to struggle, with revenue falling 7% to $3.8 billion as mainframe sales slumped. CFO Jim Kavanaugh pushed back against the notion that customers are abandoning mainframes for AI servers, stating, “We see no evidence that customers are migrating away from the mainframe.” That assertion now carries added weight — and risk — given the legal investigations into the accuracy of IBM’s prior communications.
The reputational damage may prove more consequential than the revenue shortfall. IBM’s investment thesis has long rested on the credibility of its own forecasts: mainframe cycles, recurring software revenue, and AI monetization through the watsonx portfolio. A formal investigation into whether executives manipulated the sales pipeline and misled investors about deal conversion rates strikes at the foundation of that trust. Every future earnings call and guidance update will carry a question mark until the probes conclude.
Analysts remain divided. The average price target of €215.69 implies roughly 8.1% upside from current levels, but that figure likely reflects expectations for a mainframe recovery and continued software momentum from Red Hat, HashiCorp, Confluent, and watsonx. It does not price in the legal risk. BofA has maintained a buy rating, arguing IBM is “well positioned” once execution issues are resolved. HSBC downgraded the stock to “Reduce,” and Goldman Sachs warned the results “fully confirm the bearish software scenario.” Morgan Stanley, Susquehanna, Citi, BMO Capital, and Goldman have all cut their price targets.
IBM at a turning point? This analysis reveals what investors need to know now.
For now, the Circle deal gives IBM a rare piece of good news disconnected from its core infrastructure and software headaches. Whether it translates into more than a single strong trading day depends on how quickly the company can demonstrate stability in its mainframe business and restore faith in its forward guidance — a task made harder by the very investigations now hanging over its management.
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