IBM saw a remarkable 12% surge in its stock price on Thursday, driven by a strong fourth-quarter performance that showcased the company’s impressive growth in artificial intelligence (AI).
This boost marked IBM’s best day since July 2000, when shares soared 13%. The company’s growth, particularly in its software business, signals that its AI-driven strategy is paying off and positioning the tech giant for a solid future.
IBM Q4 results
IBM reported adjusted earnings of $3.92 per share on $17.55 billion in revenue for the fourth quarter, surpassing analysts’ expectations of $3.75 per share and $17.54 billion in revenue, as per data from LSEG.
The company saw a modest 1% increase in overall revenues, with its software unit standing out with a 10% year-over-year growth, driven largely by the growing demand for artificial intelligence solutions and its Red Hat Linux operating system.
IBM secures $5 billion in bookings
CEO Arvind Krishna highlighted the company’s impressive performance, noting that IBM secured $5 billion in bookings for its generative AI segment.
“We closed the year with double-digit revenue growth in Software for the quarter, led by further acceleration in Red Hat,” Krishna stated.
Clients globally continue to turn to IBM to transform with AI.
The company’s focus on AI transformation is positioning it as a leader in the field, with clients increasingly relying on IBM to drive digital transformation with innovative solutions.
Despite the strong results, JPMorgan analyst Brian Essex maintained a neutral rating on IBM but acknowledged the company’s progress, particularly its software business, which has been a key driver of its growth trajectory.
On the other hand, Goldman Sachs analyst James Schneider reiterated his buy rating, praising the company’s software strength and the positive impact it should have on IBM’s long-term turnaround plan.
IBM’s solid performance in Q4 has contributed to an 18% year-to-date gain for its stock, reflecting the market’s growing confidence in the company’s ability to execute its AI and software strategy.
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