Should I buy Red Hat stock in 2025?

What is Red Hat?

What is the price of Red Hat stock?

The price of Red Hat stock is falling this week. As of 30 May 2025, the IBM share—reflecting Red Hat's performance—trades at $258.69, marking a 0.60% decrease (-$1.55) over the last 24 hours and a slight drop of 0.02% over the week.

The company holds a market capitalization of $240.43 billion, with an average three-month volume of 4.69 million shares. IBM's price-to-earnings (P/E) ratio stands at 44.50, with a 2.60% dividend yield and a beta of 0.66, indicating moderate volatility compared to the broader market.

While recent performance shows some fluctuation, the combination of defensive positioning and dividend income may appeal to Irish investors seeking stable tech sector exposure.

Our full analysis of the Red Hat stock

Over the past three years, we have closely reviewed Red Hat’s robust financial contribution—now as a critical division of IBM—alongside the stock’s impressive technical structure and comparative positioning within the global technology sector. Integrating leading market data, the latest financials, and competitor analysis through our proprietary algorithms, we find IBM’s performance, underscored by Red Hat’s dynamic growth, especially instructive. So, why might renewed focus on Red Hat—as a strategic asset within IBM—set the stage for an attractive entry into enterprise cloud and AI markets in 2025?

Recent performance and market context

Red Hat, although no longer listed independently following its landmark $34 billion acquisition by IBM in 2019, continues to drive IBM’s stock profile through its pivotal role in cloud and open source software. As of 30 May 2025, IBM shares are trading at $258.69, near the higher end of their 52-week range ($163.53-$269.28). Despite a short-term -5.35% decline over the past month and a YTD dip of -17.68%—largely attributed to sector-wide volatility and shifting macro themes—the long-term trend remains structurally intact.

• Key positives driving recent performance:
• Red Hat delivered 16% annual revenue growth in Q4 2024, outperforming analyst expectations.
• Its software division now comprises nearly 29% of IBM’s total revenue, with Red Hat surpassing $6.5 billion in annual turnover—nearly doubling since 2019.
• IBM’s $5 billion+ AI order backlog and expanded stake in digital transformation with major partners such as Deutsche Bank signal ongoing demand for hybrid infrastructure.
• The U.S. market outlook remains supportive, with IBM committing $150 billion in domestic investment.

Coupled with a global shift toward cloud-native platforms, open source adoption, and accelerating enterprise AI deployments, the broader macroeconomic context favours the differentiated value that Red Hat adds to IBM. The competitive landscape, while intense, continues to validate Red Hat’s sustained double-digit growth and resilience as a go-to enterprise cloud enabler.

Technical analysis

From a technical perspective, IBM’s share performance—a direct proxy for Red Hat’s value generation—exhibits multiple bullish signals.

• Moving averages and price action:
• The 50-day moving average ($243.30) has established a clear golden cross above the 200-day ($235.70), confirming a medium-term bullish trend.
• Current price action remains above both major averages, reinforcing an upswing bias despite recent retrcements.

• Momentum indicators:
• The RSI oscillates between 55 and 75, consistent with buying strength yet maintaining headroom for further gains.
• MACD is positive (5.88), suggesting persistent upward momentum, albeit with some consolidation.

• Key technical levels:
• Strong support is identified at $250—recently retested, providing a robust base.
• Immediate resistance rests at $262.39, with major resistance set by the 52-week high at $269.28.

These analytical markers indicate a favourable risk/reward dynamic for investors seeking tactical entry points, particularly as the stock consolidates above support and eyes a breakout into new highs should macro and company-specific catalysts continue to materialise.

Fundamental analysis

Red Hat's transformative effect on IBM's fundamentals is apparent in both headline numbers and structural strengths:

• Revenue growth and profitability:
• Red Hat's recurring revenue model delivered 16% YoY growth in the latest quarter, driving double-digit software expansion (+10.4% overall for IBM).
• IBM’s free cash flow hit $12.7 billion in 2024—a $1.5 billion increase over 2023—demonstrating robust cash conversion that underpins both growth investments and reliable dividend payouts.

• Valuation:
• IBM currently trades at a P/E ratio of 44.5, a premium reflecting market conviction in cloud hybrid and AI segments, as well as defensive qualities in the sector.
• The $258.69 share price, with an algorithmic target of $336.30 (+30%), appears justified when factoring in Red Hat’s compound annual growth (double-digit since acquisition), high retention rates, and sustained margin expansion.
• Dividend yield remains solid at 2.60%, providing defensive ballast for investors, while the payout is well-covered by cash flow.

• Structural strengths:
• Red Hat has become the gold-standard for hybrid cloud platforms, notably OpenShift, widening IBM’s moat among large enterprises shifting to open ecosystems.
• Ongoing R&D investment ($7.5 billion in 2024) secures continual innovation and integration with next-gen technologies, especially generative AI and quantum computing.
• Brand identity and deep-rooted open source culture are preserved within IBM, aiding in talent retention and ecosystem expansion.

Collectively, these fundamentals support the thesis for renewed institutional and individual interest, especially as IBM harnesses Red Hat’s dynamism to reposition as a cloud- and AI-first leader.

Volume and liquidity

Liquidity and volume statistics for IBM reinforce market confidence:

• Sustained high average daily volume (4.69 million shares) assures deep order books and efficient price discovery—minimising trading slippage for both retail and institutional investors.
• Effective float: With 928.4 million shares on the market and a public float that nears 100%, IBM exhibits excellent liquidity conditions, essential for dynamic valuations and robust entry/exit flexibility.

This liquid backdrop is particularly appealing for investors in the Irish market, where access to large-cap US equities is often prioritised for strategic portfolios.

Catalysts and positive outlook

Multiple forward-looking catalysts position Red Hat (via IBM) at the vanguard of technology investing through 2025:

• Hybrid cloud leadership: Red Hat OpenShift’s expansion cements its role as the enterprise platform of choice for cloud-native development and multi-cloud orchestration.
• AI integration: The embedding of Red Hat’s open source stack with IBM’s generative AI solutions addresses rising demand for reliable, scalable, and secure data infrastructures.
• Strategic partnerships: Landmark digital transformation deals (e.g., Deutsche Bank) validate Red Hat's mission-critical status within the enterprise ecosystem.
• Geographic and sector expansion: Growing penetration in emerging markets and cross-industry adoption continue to expand Red Hat’s addressable market.
• ESG and social responsibility: As businesses worldwide transition towards sustainable and open architectures, Red Hat’s commitment to open source and responsible innovation resonates with a new wave of conscientious investors.

Looking ahead, IBM forecasts at least 5% year-on-year revenue growth at constant currency, with free cash flow expected to reach $13.5 billion in 2025. This positive sentiment is echoed by market analysts, flagging Red Hat as a long-term differentiator in both competitive and ESG-conscious portfolios.

Investment strategies

Red Hat’s sustained momentum within IBM’s portfolio offers a broad spectrum of strategic entry points:

• Short-term: Technical setup above key support ($250) with a potential upside to the $262-269 range for traders capitalising on near-term catalysts, such as quarterly earnings or partnership announcements.
• Medium-term: A golden cross and strong fundamentals align to provide a springboard for investors anticipating further breakout, especially as the software and AI narratives continue to build. Entry at or near current levels ahead of projected 2025 milestones appears well-supported by ongoing revenue acceleration and margin expansion.
• Long-term: For strategic, buy-and-hold investors, Red Hat’s consistent double-digit growth, regular dividend stream, and its pivotal role in IBM’s transformation journey make it a compelling core holding for diversified technology exposure.

In all scenarios, constructive price action, superior liquidity, and a robust innovation pipeline provide confidence that investors are positioning ahead of a potential new bullish cycle.

Is it the right time to buy Red Hat?

In summary, Red Hat’s integration into IBM has fortified its status as a strategic technology asset—with technical, fundamental, and qualitative analysis all converging to suggest a favourable window for renewed portfolio exposure. Key strengths include sustained double-digit growth, leading market share in the hybrid cloud domain, successful integration of advanced AI and open source offerings, and resilient cash flow supporting attractive dividend payouts.

With a clear golden cross, robust support levels, and accelerating adoption across cloud and AI markets, the stock may well be entering a new bullish phase. Investors in the Irish market and beyond should consider the unique benefits of participating in IBM’s transformation, driven in large part by Red Hat’s sustained leadership and innovation.

For those seeking a growth-oriented, defensive anchor in the technology sector, IBM—powered by Red Hat—seems to represent an excellent opportunity to align with the next evolution of enterprise cloud and AI platforms. As the appetite for digital transformation and hybrid infrastructures continues to climb, this position stands out as one to watch closely for strategic allocation and long-term value creation.

How to buy Red Hat stock in Ireland?

Investing in Red Hat stock online is a straightforward and secure process when using a regulated broker—your capital is protected within established financial safety standards. While Red Hat is no longer listed independently, you can gain direct exposure to its business performance by trading International Business Machines (IBM) shares, since Red Hat now operates as a key IBM division. There are two main routes: buying IBM shares directly (spot) or trading Contracts for Difference (CFDs), which let you go long or short with leverage. To find the broker that best matches your needs, refer to our in-depth comparison table further down this page.

Spot Buying

A cash (spot) purchase of Red Hat—now IBM—stock involves directly owning shares on the New York Stock Exchange via your broker. Irish investors typically pay a fixed commission per trade, such as €5–€10, alongside a possible small currency conversion fee if funding with euro (as IBM is quoted in USD).

Example: IBM spot share purchase (simple calculation)

For example, with the IBM share price at $258.69 and a brokerage commission of $5, a $1,000 investment allows you to buy around 3 shares ($1,000 minus $5 fee = $995; $995 ÷ $258.69 ≈ 3.8, rounded down to 3 shares due to whole share purchase).
✔️ Gain scenario: If IBM rises by 10%, your 3 shares become worth $854 (3 × $284.56). That’s a +$77 gain on your initial $777 outlay (excluding fractional shares and fees), for approximately +10% gross return on your investment.

Trading via CFD

A CFD (Contract for Difference) lets you speculate on the IBM share price—gaining exposure to Red Hat’s performance—without physically owning shares. You trade on margin, paying fees via the "spread" (difference between buy/sell price) and daily overnight interest if leveraged positions are left open.

Example: CFD trade with leverage

Example: With a $1,000 deposit and 5x leverage, you gain exposure to $5,000 worth of IBM shares via CFDs.
✔️ Gain scenario: If IBM’s price rises 8%, your position's return is amplified: 8% × 5 = 40%. You make a $400 profit on your $1,000 stake (excluding spread and financing fees), showing the potential power—and risk—of leveraged investing.

Final Advice

Before investing, it’s essential to compare broker commissions, exchange rates, spreads, and overnight costs. Your ideal method depends on your objectives: spot buying suits long-term investors seeking ownership and dividends, while CFDs are tailored to active traders seeking short-term price movements with leverage. For detailed broker options and up-to-date conditions, see our independent comparison further down the page.

Our 7 tips for buying Red Hat stock

The latest news about Red Hat

Red Hat, now a key division within IBM, delivered accelerated growth of 16% in Q4 2024, significantly surpassing market expectations and underpinning the robust performance of IBM’s software segment. This result highlights not only the resilience of Red Hat’s business model but also its deepening strategic value to IBM’s cloud and hybrid offerings, crucial for global enterprises. The division’s annual contribution has doubled since the 2019 acquisition, now reaching approximately $6.5 billion in revenue, with the momentum supported by growing demand for open-source solutions across both established markets and innovation-driven sectors, including Irish and EMEA-based cloud enterprises and public sector digital transformation projects.

Technical market indicators for IBM, which incorporates Red Hat’s performance, have turned increasingly positive, reinforcing bullish medium-term sentiment among international investors. IBM’s stock currently trades at $258.69, maintaining a position above both its 50-day and 200-day moving averages—an established golden cross pattern recognized for signaling sustained upward momentum. Relative Strength Index (RSI) levels between 55 and 75 signal healthy buying interest, while current support and resistance levels (notably $250 and $262.39, respectively) are closely watched by market participants. For institutional and private clients in Ireland, the attractiveness of a stable 2.6% dividend yield and a moderate beta of 0.66, indicating reduced volatility versus the broader market, is particularly relevant in portfolio construction.

IBM’s strategic investments and the ongoing integration of Red Hat are yielding strong results, with the acquisition on track to achieve profitability by early 2025 and Red Hat generating nearly $30 billion in cumulative revenue since 2019. The company continues to reinforce its positioning via expanded AI generative offerings (with a $5 billion-plus order book announced recently) and high-profile international partnerships, such as the extension of digital transformation collaboration with Deutsche Bank. For Irish enterprise customers and investors, the strengthening of IBM’s and Red Hat’s European presence supports local innovation ecosystems and digital initiatives, reflecting a global–local alignment in strategic execution.

Red Hat’s leadership in cloud hybrid solutions and ongoing integration with IBM's advanced technologies, including quantum and AI, are central to the group’s positive market outlook and future growth catalysts. Annual guidance now points to at least 5% revenue growth and free cash flow expectations around $13.5 billion for the current year, driven by surging enterprise demand for cloud orchestration, secure open-source infrastructure, and the convergence of artificial intelligence with traditional IT solutions. This growth trajectory contributes directly to IBM’s differentiated offering in both established and emerging European markets, attracting the interest of both Irish corporates seeking digital transformation and investors pursuing exposure to defensive yet forward-looking technology plays.

Irish investors in IBM (and therefore in Red Hat’s success) benefit from eligibility in popular tax-advantaged investment accounts and from Red Hat’s active participation in European and Irish digital transformation programs. The stock is readily accessible on the NYSE, and—critically for the Irish context—is eligible for inclusion within UK Individual Savings Accounts (ISA) and Irish brokerage platforms, facilitating participation in IBM’s ongoing dividend program and capital gains opportunities. Moreover, Red Hat continues to strengthen relationships with Irish technology clusters and universities to accelerate cloud-native workforce skills and spur local adoption of open-source hybrid cloud solutions, which supports broader ecosystem resilience and innovation in Ireland.

FAQ

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.