IBM stock jumps after IBM earnings: IBM stock price today jumps over 7% after IBM earnings beat estimates – AI software growth and big acquisitions spark investor frenzy
IBM Stock Rises After Strong Q4 Earnings Beat Expectations
According to the report, the company generated revenue of $19.69 billion in the quarter, beating analysts’ estimates of $19.23 billion, and adjusted earnings came in at $4.52 per share, above the expected $4.32 per share.
IBM Stock Price Soars Today: Artificial Intelligence Fuels Growth of IBM Software Segment
Artificial intelligence continues to be a key driver of growth for IBM. According to a Reuters report, revenue from the software segment reached $9.03 billion, exceeding expectations of $8.77 billion. In the software field, the Automation unit grew by 18%, while the Data unit increased by 22% in this quarter.
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Strategic Acquisitions Strengthen IBM’s Software Portfolio
IBM is actively expanding its software capabilities through acquisitions, including the $6.4 billion HashiCorp acquisition and the ongoing $11 billion acquisition of Confluent. The Confluent deal is expected to contribute approximately $600 million in dilution in 2026, primarily from stock-based compensation and interest expenses, CFO Jim Kavanaugh said, according to the Reuters report.
IBM Earnings: Hybrid Cloud Growth Slows Due to Federal Shutdown
Red Hat, IBM’s high-margin hybrid cloud business, saw its growth fall from 14% in Q3 and 16% in Q2 to 10% in Q4. Kavanaugh attributed the slowdown in part to the longest U.S. government shutdown in history last quarter, noting that federal customers make up about 15% of Red Hat’s bookings, according to a Reuters report.
Also read: Meta shares rise over 9% today after commodity earnings beat estimates and AI spending outlook boosts investor confidence
Federal Funding Risks May Affect Red Hat Reservations
He said the company hopes any disruptions will be short-term, although the federal government faces the risk of another partial shutdown this week. “We’re going to have to deal with this as we move forward. Hopefully this will be a short-term disruption,” Kavanaugh said, according to Reuters. “If the government passes the budget resolution and gets back to business and doesn’t continue to shut down, we’ll just have to wait and see how this plays out,” Kavanaugh said, according to Reuters.
IBM AI Book of Business Expands to $12.5 Billion
The company’s artificial intelligence-focused services continue to expand rapidly. IBM’s “Artificial intelligence business book” increased by $3 billion compared to the previous quarter, reaching $12.5 billion. Kavanaugh said the company will stop reporting this metric separately starting in the first quarter of 2026.
FAQ
Why did IBM shares rise today?
IBM beat revenue and earnings forecasts, driven by strong AI and software demand.
How much revenue did IBM report?
IBM reported revenue of $19.69 billion, above analysts’ forecast of $19.23 billion
