International Business Machines Corporation (IBM Quick QuoteIBM – Free Report) and Accenture (ACN Quick QuoteACN – Free Report) are major players in the digital transformation and consulting space worldwide. IBM’s Consulting business focuses on designing, creating and operating various technology and business processes based on open or hybrid cloud architecture powered by generative AI. The enterprise clients collaborate with IBM to build and implement tailored solutions securely and transform their processes with AI and automation.
Accenture is also a prominent player in the field. Its strategy and consulting services ensure operational improvements, enhance competitiveness, optimize cost and streamline every part of the enterprise’s processes.
With deep industry acumen and a focus on investing in advanced technologies, both IBM and Accenture are strategically positioned to match the dynamic nature of enterprises’ digital transformation initiatives. Let us dive a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in the industry.
The Case for IBM
IBM Consulting business is benefiting from growth in technology consulting, supply chain and business application transformations. The company’s robust AI technologies from the software segment, coupled with its broad partner ecosystem, which includes AWS, Microsoft, Oracle and SAP SE (SAP Quick QuoteSAP – Free Report) , allow it to seamlessly develop intelligent operation services for its customers. The company’s IBM Consulting Advantage is an AI delivery platform that equips IBM consultants with industry and business domain-specific AI assistants integrated with IBM Granite and various other leading AI models. The solution is a game changer compared to legacy traditional consulting approaches, allowing IBM to deliver solutions at scale and accelerate time to value.
Leveraging its partner ecosystem, IBM is expanding its market reach in various sectors. It has collaborated with SAP to tap generative AI technology within the retail industry. The collaboration is likely to facilitate higher productivity and help accelerate business transformation in consumer-packaged goods and retail firms. The technology focuses on feeding external data such as weather, traffic and local events into the SAP Direct Distribution solution and applies AI to identify optimal store delivery routes to reduce costs. IBM’s effort to diversify its portfolio to create new revenue-generating opportunities augurs well for long-term growth.
However, current macroeconomic uncertainty and growing geopolitical volatility continue to impact client spending decisions. This is hindering IBM Consulting’s net sales growth. In the first quarter of 2025, the company’s consulting signings decreased 10.5% year over year. Intensifying competition from other major players, such as Accenture, Infosys, and Tata Consultancy Services, particularly remains a concern.
The company is steadily improving its product offerings through innovation and strategic acquisitions to address these issues. IBM recently acquired Hakkoda Inc., a prominent data consultancy provider. Integration of Hakkoda’s capabilities in migrating, modernizing and monetizing data estates along with comprehensive generative AI capabilities with IBM Consulting will allow it to match the growing demand for AI-transformation initiatives across industries. IBM is also acquiring Oracle consulting companies to enhance its consulting expertise in Oracle Cloud applications.
The Case for Accenture
Growing spending on application modernization and maintenance, cloud enablement and cybersecurity-as-a-service boasts a solid growth opportunity for Accenture. Organizations across industries are prioritizing improving productivity and saving operational costs by transforming their operations through data and analytics, automation and artificial intelligence. These emerging market trends are driving demand for Accenture’s managed services business.
The company places a strong emphasis on developing a robust digital core by utilizing cloud, data and AI, and technology evolution. It continuously innovates its services and capabilities through early adoption of advanced technologies, including generative AI, blockchain, robotics, 5G and edge computing. Moreover, strategic collaboration with major technology giants like Amazon Web Services, Cisco, Databricks, Google, HPE, SAP, and Oracle drives innovation and boosts competitive edge. The company recently joined forces with Dell and NVIDIA to provide enterprise customers with an open, interoperable, scalable solution that accelerates AI transformation initiatives.
The company has been witnessing steady customer growth in the finance domain. The largest financial group in Finland, the OP Financial Group, has recently opted to leverage Accenture’s solution to modernize its insurance business processes. Apart from in-house innovation, the company is acquiring a large number of companies to venture into high-growth areas.
However, although this strategy improves revenue generation opportunities and enhances market reach, it also raises integration risks. This could impact organic growth going forward. In the IT services and consulting market, the company faces competition from IBM, Infosys and Capgemini. This put pressure on pricing. Macroeconomic headwinds remain a concern.
How Do Zacks Estimates Compare for IBM & ACN?
The Zacks Consensus Estimate for IBM’s 2025 sales and EPS implies year-over-year growth of 5.5% and 6%, respectively. The EPS estimates for 2025 and 2026 have been trending northward over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Accenture’s 2025 sales and EPS implies year-over-year growth of 5.41% and 6.11%, respectively. The EPS estimate for 2025 has remained unchanged for the past 60 days, and the estimate for 2026 has been trending southward over the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of IBM & ACN
Over the past year, IBM has gained 50.5%, while Accenture has gained 3.1% over the same period.
Image Source: Zacks Investment Research
Going by the price/earnings ratio, IBM’s shares currently trade at 23.02 forward earnings, slightly lower than 23.95 for Accenture.
Image Source: Zacks Investment Research
IBM or ACN: Which is a Better Pick?
Both IBM and Accenture carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Accenture has shown steady revenue growth for years, while IBM has been facing a bumpy road. However, IBM’s broad technology portfolio, integration of cutting-edge hybrid cloud and AI technologies, gives it a competitive edge. Better price performance and upward estimate revision highlight investors’ growing confidence. Hence, IBM seems to be a better investment option at the moment.
