IBM Stock Price Today
IBM shares experienced a notable surge of over 7% during after-hours trading on Wednesday, buoyed by the company’s fourth-quarter earnings that surpassed Wall Street’s forecasts.
This upward trajectory was primarily fueled by increasing demand for its software services, amidst the swift ascent of artificial intelligence (AI) adoption.
IBM Stock Rises After Impressive Q4 Earnings
The tech giant reported a revenue figure of $19.69 billion for the quarter, eclipsing analysts’ predictions of $19.23 billion. Moreover, adjusted earnings per share stood at $4.52, exceeding the expected $4.32 per share, according to a detailed report.
IBM Stock Price Up Today: AI Propels Growth in Software Segment
The burgeoning field of AI remains a pivotal catalyst for IBM’s growth. The revenue generated from its software segment reached an impressive $9.03 billion, surpassing the anticipated $8.77 billion, as reported by Reuters.
In particular, the Automation division experienced an 18% increase, while the Data division soared by 22% during the quarter.
Strategic Acquisitions Fortify IBM’s Software Portfolio
IBM has been methodically enhancing its software capabilities through strategic acquisitions, including the $6.4 billion acquisition of HashiCorp and an ongoing $11 billion acquisition of Confluent.
CFO Jim Kavanaugh indicated that the Confluent acquisition is projected to incur approximately $600 million in dilution by 2026, primarily attributable to stock-based compensation and interest expenses, as per the Reuters report.
IBM Earnings: Hybrid Cloud Growth Decelerates Amid Federal Shutdown
The high-margin hybrid cloud segment, particularly with Red Hat, witnessed a slowdown in growth to 10% in Q4, a decline from 14% in Q3 and 16% in Q2.
Kavanaugh attributed this deceleration, in part, to the protracted U.S. government shutdown last quarter, noting that federal clients constitute approximately 15% of Red Hat’s bookings, as indicated by Reuters.
Federal Funding Risks Could Impact Red Hat Bookings
Kavanaugh highlighted the potential for another partial government shutdown this week, expressing hope that any resulting disruptions will be brief.
He remarked, “We will need to navigate that as we proceed. Hopefully, it will be a short-term disruption,” further adding, “If the government ratifies the budget resolution and resumes operations without further shutdowns, we will have to monitor how that unfolds,” as quoted by Reuters.
IBM AI Book of Business Expands to $12.5 Billion
The company’s AI-centric services continue to flourish at an impressive pace. IBM’s “AI book of business” grew by $3 billion from the preceding quarter, culminating in a total of $12.5 billion.
Kavanaugh announced that the company intends to cease reporting this metric separately beginning in the first quarter of 2026.
FAQs
Why did IBM stock rise today?
The stock surged as IBM surpassed both revenue and earnings expectations, driven by robust demand in AI and software.
How much revenue did IBM report?
IBM reported a revenue of $19.69 billion, exceeding analysts’ expectations of $19.23 billion.
Source link: M.economictimes.com.
