This study provides a new perspective to the long-standing debate on the business value of IT. Advancing prior research on the internal perspectives of IT value creation, we take an external view and investigate the role of stock analysts in facilitating the market evaluation of firms’ IT investments. Stock analysts collect information about firms’ IT investments and provide informed recommendations to investors in the financial market. As IT investments are known for their complexity and inherent risks, stock analysts can reduce information asymmetry between the firm and investors in the financial markets, thus helping discovering the business value of IT investments. On the basis of Fortune 1000 firms between 1996 and 2007, our analysis suggests that stock analysts play an intricate mediating role in the stock market evaluation of IT investments. Analyst recommendations have a strong mediating role in the effects of enterprise IT systems (ERP and CRM) on firm market value, but a weak to insignificant mediating role in the effects of function IT systems (DSS, HR and AIS). In addition, we find that the mediating role of financial analysts for IT investments is more salient when the firm’s market environments are more uncertain and unpredictable. These findings suggest that analyst recommendations play a critical role in the stock market valuation of firms’ IT investments in situations where the value of such investments is difficult to assess.