IBM Stock Surges On Current AI Hype

Jan 25, 2024 thejournalbiz

Profit at International Business Machines rose as strong demand for artificial intelligence pushed revenue higher than analysts had expected.

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Profit at @IBM rose as strong demand for artificial intelligence pushed revenue higher than analysts had expected, Bloomberg reports#ibm #ai #markets https://t.co/NixyhhB5AX

— The_Journalbiz (@the_journalbiz) January 25, 2024

Bloomberg on IBM

Chief Executive Arvind Krishna said client demand for AI is accelerating. He said IBM’s book of business for Watsonx, its generative AI platform, roughly doubled from the previous quarter.

IBM stock surged more than 11% in early trading to above $194 a share.

That put it on course for a multiyear high: IBM shares haven’t closed above $194 since 2013.

It was the best performer among both the Dow industrials and the S&P 500 on Thursday.

Each of the legacy tech giant’s segments reported higher revenue. The biggest gain came in consulting while IBM’s infrastructure unit logged a smaller bump.

The top line of IBM’s software business, its largest by revenue, rose 3% to $7.5 billion as growth from its cloud-computing subsidiary Red Hat and smaller gains from automation and AI more than offset a 5% decline from its security division.

IBM’s fourth-quarter report, by the numbers:

Revenue rose 4% from a year earlier to $17.38 billion, topping analyst forecasts by about 0.5%, according to FactSet.
Profit jumped by more than a fifth, to $3.29 billion.
Adjusted per-share earnings, which strip out one-time items, of $3.87 topped analyst forecasts by 2%, according to FactSet.
Outlook: IBM still expects revenue to grow by a mid-single-digit percentage this year on a constant-currency basis.