IBM Surges 13% on Strong Q4 Print, AI Growth Boosts Software Business
IBM surged 13% on the back of a strong fourth-quarter print, with its software business growing 10% on a year-over-year basis due to increasing demand for artificial intelligence (AI) and its operating system, Red Hat Linux. The company reported adjusted earnings of $3.92 per share on $17.55 billion in revenue, exceeding analyst expectations.
The 1% rise in revenues overall was spearheaded by the growth in the software segment, which also saw a $5 billion bookings for its generative AI segment. CEO Arvind Krishna noted that clients globally are turning to IBM to transform with AI.
Analysts such as JPMorgan’s Brian Essex and Goldman Sachs’ James Schneider have expressed encouragement at the company’s software strength and growth trajectory, with Essex maintaining a neutral rating and Schneider reiterating his buy rating. Shares of IBM have risen 16% since the start of the year.