If or probably when International Business Machines Corp. (NYSE:IBM) starts scaling back its share buyback program, the stock could stall. However, if Warren Buffett remains a key buyer of the company’s shares, he could make up for that decline, at least for now, according to Bernstein Research analysts.

Investors surprised at IBM’s stock price stability

So far this year, International Business Machines Corp. (NYSE:IBM) stock has been staying roughly in line with the S&P 500, just barely outperforming it, and in a report dated April 28, 2014, Bernstein analysts say this has surprised investors. Toni Sacconaghi, Jr., Eric Garfunkel and Jonathan Cofsky cite three main reasons for ths.

First, they note that the company’s last two quarterly earnings reports were quite disappointing. Second and as a result of the first reason, investors have become increasingly concerned about International Business Machines Corp. (NYSE:IBM)’s earnings quality. And third, the company’s stock looks rather expensive compared to several of its large-cap peers within the technology sector, based on cash flow valuation.

IBM holds up stock price through share repurchases

The Bernstein team notes that International Business Machines Corp. (NYSE:IBM)’s share purchases have been helping hold its stock steady recently. The company bought back about 10% of its daily trading volume in the fourth quarter of 2013 and 14% of it in the first quarter. An additional factor the analysts believe has contributed to IBM’s stock price stability is the recent shift away from high-growth, high-valuation stocks.

Warren Buffett IBM

Going forward though, investors may not be able to count on International Business Machines Corp. (NYSE:IBM) to continue buying back its stock at these rapid paces. Bernstein analysts believe that when the company scales back its share repurchases, the stock will be pressured. IBM said it plans to buy back about $5.5 billion for the rest of the 2014 fiscal year, compared to the $8.2 billion the company bought back just in the first quarter alone. Bernstein analysts came up with the $5.5 billion figure based on IBM’s statement that for the full year, it would buy back “a little bit less” than it did last year. That means IBM will likely buy back less than $13.8 billion worth of shares for the entire year.

The Bernstein analysts suggest that International Business Machines Corp. (NYSE:IBM) could buy back $3 billion during the second quarter, which would leave only about $1.25 billion for the third and fourth quarters. This would be about 5% to 6% of daily volumes, which is a significant decrease from 14% in the first quarter. It would also be an extension of what looks like front-loading of the share repurchases, as front-loading delays the impacts of the repurchases.

How Warren Buffett could affect IBM stock

They note that Warren Buffett recently said he raised his stake in International Business Machines Corp. (NYSE:IBM) during the first quarter and might add to his position even more. Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) made about $13 billion worth of IBM and made up 6% to 7% of the purchases during the second and third quarters of 2011, which was when Buffett bought his massive stake in the company. Any more share purchases could cushion the blow from IBM’s reduction in share repurchases. They say each $1 billion in shares Buffett buys is approximately 2% of quarterly volumes.

Of course we won’t know exactly how many shares Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) bought during the first quarter until the firm’s 13F filing is released in the middle of this month. Also we won’t know how many more shares, if any, Buffett’s firm may buy going forward. However, they could play a major role in what International Business Machines Corp. (NYSE:IBM)’s stock does in the near term.

How Warren Buffett has historically affected IBM’s share price

The Bernstein analysts do point out, however, that over the last 13 quarters, International Business Machines Corp. (NYSE:IBM) stock outperformed in four of the last five times when the company itself and Buffett have, together, made up at least 9% of share purchases in the quarter. On the other hand, the stock underperformed in five of the eight times when Buffett and IBM together made up 8% of less of all the purchases during the quarter.

They don’t believe there’s a good chance Buffett and IBM will make up at least 9% of the share purchases in both the second and third quarters.