Critical Comparison: International Business Machines (NYSE:IBM) and Nebius Group (NASDAQ:NBIS)

Nebius Group (NASDAQ:NBIS) and International Business Machines (NYSE:IBM) are both large-cap technology companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.

Earnings and Valuation

This table compares Nebius Group and International Business Machines”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nebius Group	$529.80 million	107.81	$82.50 million	$3.10	72.82
International Business Machines	$67.53 billion	3.28	$10.59 billion	$11.27	20.86

International Business Machines has higher revenue and earnings than Nebius Group. International Business Machines is trading at a lower price-to-earnings ratio than Nebius Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for Nebius Group and International Business Machines, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nebius Group	0	7	9	2	2.72
International Business Machines	1	11	15	0	2.52

Nebius Group presently has a consensus price target of $222.29, indicating a potential downside of 1.53%. International Business Machines has a consensus price target of $265.40, indicating a potential upside of 12.92%. Given International Business Machines’ higher probable upside, analysts plainly believe International Business Machines is more favorable than Nebius Group.

Profitability

This table compares Nebius Group and International Business Machines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nebius Group	95.27%	-9.11%	-3.73%
International Business Machines	15.52%	35.65%	7.54%

Risk and Volatility

Nebius Group has a beta of 4.23, suggesting that its share price is 323% more volatile than the S&P 500. Comparatively, International Business Machines has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.

Institutional & Insider Ownership

21.9% of Nebius Group shares are held by institutional investors. Comparatively, 59.0% of International Business Machines shares are held by institutional investors. 0.3% of International Business Machines shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

International Business Machines beats Nebius Group on 9 of the 15 factors compared between the two stocks.

About Nebius Group

Nebius Group N.V., a technology company, builds intelligent products and services powered by machine learning and other technologies to help consumers and businesses navigate the online and offline world. The company’s services include Nebius AI, an AI-centric cloud platform that offers infrastructure and computing capability for AI deployment and machine-learning oriented solutions; and Toloka AI that offers generative AI (GenAI) solutions at every stage of the GenAI lifecycle, such as data annotation and generation, model training and fine-tuning, and quality assessment of large language model for accuracy and reliability. It also offers Avride, an autonomous driving solution which targets ride-hailing, logistics, e-commerce, and food/grocery delivery as application domains, as well as focuses on autonomous vehicles and delivery robots; and TripleTen, an EdTech service that prepares specialists for STEM roles, and equipping them with essential technology skills. The company was formerly known as Yandex N.V. and changed its name to Nebius Group N.V. in August 2024. Nebius Group N.V. was founded in 1989 and is based in Schiphol, the Netherlands.

About International Business Machines

International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on skills integration for strategy, experience, technology, and operations by domain and industry. The Infrastructure segment provides on-premises and cloud based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, facilitates IBM clients’ acquisition of hardware, software, and services. The company has a strategic partnership to various companies including hyperscalers, service providers, global system integrators, and software and hardware vendors that includes Adobe, Amazon Web services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.